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
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