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India Base Metals: Up on MCX, LME on China stimulus hope, weak dollar

Informist, Friday, May 27, 2022


By Sandeep Sinha


MUMBAI – Futures contracts of all base metals rose today on the Multi Commodity Exchange of India and the London Metal Exchange due to improved risk appetite on hope China will support its ailing economy further and weakness in the US dollar.


* The People’s Bank of China on Wednesday said it would promote more credit for smaller firms and boost financial institutions’ confidence to lend funds as policymakers in the world’s top metal consumer struggle to get the economy back on track.


* The dollar index touched a five-week low of 101.45 today amid expectation that the Federal Reserve may pause rate hikes in the second half of the year. A weak greenback makes dollar-denominated commodities cheaper for holders of other currencies.


“The base complex has become a bit of side show when you consider the recent moves in the energy space — overnight and the rally across the steel sector sees us bounce,” Al Munro at broker Marex said in a note. 


ALUMINIUM traded firm on reports that Indonesia may ban bauxite export, and workers at Russian giant Rusal-owned Compagnie des Bauxites de Dian Dian mine in Guinea went on strike demanding higher wages and a better work environment.   


* A constant decline in LME-approved warehouse stock also gave a boost to sentiment. 


* Investors will take further cues from US core personal Consumer Price Index, which is the Federal Reserve’s preferred inflation gauge. 


* Aluminium rose on short-covering of positions by traders on the domestic bourse and a fall in LME inventory.


ZINC contract rose, taking cues from LME and a rally in steel prices in China. Traders taking long positions on the MCX also bolstered prices. 


* At 1625 IST, on the MCX, the June futures contract of:

 –Aluminium was at 242.25 rupees, up 1%

 —COPPER was at 774.35 rupees a kg, up 0.3% 

 —LEAD was at 182.20 rupees a kg, up 0.6%

  –ZINC was at 327.25 rupees a kg, up 1.8%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 238.5-247.5 rupees per kg

 –Copper seen at 764.0-786.0 rupees per kg

 –Lead seen at 180.5-186.0 rupees per kg

 –Zinc seen at 320.0–331.0 rupees per kg



US$1 = 77.56 rupees

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


Edited by Deepshikha Bhardwaj



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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