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India Base Metals: Most up on China demand revival hopes, dlr slips

Informist, Monday, May 23, 2022


By Sandeep Sinha


MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India, taking cues from the London Metal Exchange. The rise was because of a retreat in the dollar index, which hit a 20-year high last week, and hopes of recovery in demand for industrial metals in China. The positive momentum was also aided by a continued decline in LME stocks. 


* The dollar index fell 0.8% to 102.17, as investors lowered bets of steep rate hikes by the US Federal Reserve. The index measures strength in the dollar against a basket of major currencies. A weaker greenback makes dollar-denominated commodities cheaper for foreign holders.


* “Base metals are finding support from a weaker US dollar and appear to be still profiting from the unexpectedly sharp reduction of the longer-term loan prime rate in China on Friday,” Commerzbank said in a report. 


* Market participants are waiting for the minutes of the US Federal Open Market Committee’s latest meeting to know its future stance on rate hikes. The minutes are scheduled for release on Wednesday.


ALUMINIUM prices were marginally up due to a tight physical market. The LME inventory declined by 7,025 tn to a 17-year low of 497,250 tn today. Last week, it fell by 35,525 tn to 50,4275 tn.   


COPPER prices rose due to short covering by traders on the MCX and a drop in LME stocks by 3,525 tn. Data by Commodity Futures Trading Commission showed that traders reduced bearish bets on copper by 538 lots on COMEX last week. This also supported the positive sentiment.


ZINC prices may gain further, as the short-term trend has turned positive and prices have moved above the five- and 10-day simple and exponential moving averages.


* At 1700 IST, on the MCX, the May futures contract of:

 –Aluminium was at 248.5 rupees, up 0.1%

 –Copper was at 775.20 rupees a kg, up 0.5% 

 —LEAD was at 184.65 rupees a kg, up 0.2%

 —NICKEL was at 2,140.0 rupees a kg, down 1.9%

 –Zinc was at 322.50 rupees a kg, up 1%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 243.4-252.8 rupees per kg

 –Copper seen at 763.0-786.0 rupees per kg

 –Lead seen at 181.8-187.8 rupees per kg

 –Nickel seen at 2,130.0-2,230.0 rupees per kg

 –Zinc seen at 313.5–327.0 rupees per kg



US$1 = 77.51 rupees

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


Edited by Namrata Rao



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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