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India Base Metals: Most up tailing LME; China demand revival hopes

Informist, Monday, May 16, 2022


By Sandeep Sinha


MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India today, taking cues from the London Metal Exchange on hopes of a revival of demand in China and a rally in the equity market. A decline in the US dollar from a 20-year high further aided sentiment.


* “Most industrial metals from aluminium to copper rose on Monday as investors weighed weaker-than expected economic data from China and some signs of a revival in demand from the world’s top metal consumer”, said Tapan Patel, senior analyst (commodities) at HDFC Securities.


* “Prices of base metals are picking up as market participants hope the situation will now begin to improve and that the Chinese economy and hence the demand for metals will grow,” Commerzbank said in a report.


* “The economy will be supported by the Chinese central bank, which slightly lowered the mortgage rate for first-time homebuyers on the weekend”, the bank said.


* Shanghai Vice Mayor Chen Tong told reporters on Sunday that the city will allow a limited crowd in shopping malls, departmental stores, supermarkets, hair salons and vegetable markets from today.


ALUMINIUM futures traded flat as China’s National Bureau of Statistics data showed production rose 0.3% on year to 3.36 mln tn in April as smelters increased production due to better margins despite weak demand.


* However, LME on-warrant stocks declined to a record low of 260,000 tn, reflecting tightness in the ex-China market supporting prices at the lower level.


COPPER contracts may trade under pressure on the elevated dollar and a rise in the LME inventory by 7,825 tn to 177,000 tn last week from 169,175 tn the previous week. The Commodity Futures Trading Commission data showed money managers decreased their long positions in COMEX copper by 8,923 last week.


LEAD prices gained on short-covering by traders on the domestic bourse and a fall in LME stocks by 125 tn.


* At 1630 IST, on the MCX, the May futures contract of:

 –Aluminium was at 236.60 rupees, up 0.1%

 –Copper was at 756.75 rupees a kg, up 0.5% 

 –Lead was at 181.25 rupees a kg, up 0.6%

 —ZINC was at 308.30 rupees a kg, up 0.1%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 233.0-240.0 rupees per kg

 –Copper seen at 745.0-765.0 rupees per kg

 –Lead seen at 178.0-184.50 rupees per kg

  –Zinc seen at 304.0–316 rupees per kg




US$1 = 77.45 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Vidhi Verma


Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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