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India Base Metals: All down on risk aversion, US inflation data eyed

Informist, Friday, Jun 10, 2022


By Sandeep Sinha


MUMBAI – Future contracts of all base metal fell on the Multi Commodity Exchange of India and the London Metal Exchange due to increased risk-aversion ahead of release of the US inflation data. The sentiment was also dampened by a partial COVID-19 lockdown imposed in Shanghai and Beijing, which is likely to weigh on demand from the world’s top consumer China.


* “US-Sino relations are in a parlous state – possibly the worst since 1972 – adds to the bearish onshore macro rhetoric,” Al Munro at broker Marex said in a note. “However another concern which seems to garner little attention is the bifurcation of the world’s economy or the end of globalization,” he said.


* At its policy meeting on Thursday, the European Central Bank said it will end net asset purchases by the end of June and hinted at a 25 basis points hike in its July and September meetings. The move will make loans costlier and may affect demand for non-ferrous metals. 


* Market players look forward to the US consumer price index data due to be released later today, which may play a role in Federal Reserve’s rate hike decision next week. The consensus analysts’ forecast is for an 8.3% rise in May inflation.


* However, a sharp downside in non-ferrous metals was limited due to a decline in LME-accredited warehouse stocks and a sharp depreciation of the rupee against the dollar, which makes commodities priced in dollars expensive for domestic buyers.


ALUMINIUM prices fell as traders increased their short positions on the MCX. However, the downside was cushioned by a fall in the LME inventory by 2,700 tn. The exchange inventory current stock is 427,350 tn, down 75% from a year ago. 


COPPER prices slipped after the local community in Peru agreed to lift a temporary blockade at MMG Ltd’s Las Bambas copper mine. 


* At 1635 IST, on the MCX, the June futures contract of:

 –Aluminium was at 231.80 rupees, down 0.6%

 –Copper was at 784.10 rupees a kg, down 0.4% 

 —LEAD was at 183.60 rupees a kg, down 0.4%

 —ZINC was at 324.90 rupees a kg, down 0.1%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 227.0-235.0 rupees per kg

 –Copper seen at 772.0-797.0 rupees per kg

 –Lead seen at 181.4-185.9 rupees per kg

 –Zinc seen at 319.0–329.0 rupees per kg




US$1 = 77.83 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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