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India Base Metals: All down on fears of recession and risk aversion

Informist, Friday, Jul 1, 2022


By Sandeep Sinha


MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India and London Metal Exchange today due to weakness in the equity market, a firm dollar and fears of a recession. 


* Non-ferrous metals ended the Apr-Jun quarter on a negative note, with all major metals closing in the red on the last trading day of the quarter. They are also on track to end the week with a loss due to a risk-off sentiment amid hawkish comments from global central bank heads.


* “Recession concerns have gained the upper hand and weighed on metal prices,” Commerzbank AG said in a report. “The downturn on the base metals markets will probably pause in the absence of any new impetus.”


* “There are clearly sizeable systematic shorts now established across base metals, and no signs of their covering meaningfully,” Al Munro at broker Marex said in a note.


* Investors will take further cues from the US’s core personal consumer price index, due later today. It is the US Federal Reserve’s preferred inflation gauge. 


ALUMINIUM prices fell due to slowing automative demand and rising production in China. Market participants creating fresh short positions on the domestic bourse further hurt prices. 


COPPER contracts slid on a pessimistic global economic outlook amid increasing prospects of interest rate hikes by major central banks. Fresh short positions on the LME jumped to the highest level since 2015, and this also weighed on the sentiment. 


* At 1650 IST, on the MCX, the July futures contract of:

 –Aluminium was at 206.40 rupees, down 1.1% 

 –Copper was at 674.55 rupees a kg, down 2.8% 

 —LEAD was at 173.90 rupees a kg, down 0.1%

 —ZINC was at 277.00 rupees a kg, down 3.6%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 203.5-210.0 rupees a kg

 –Copper seen at 665.0-681.0 rupees a kg

 –Lead seen at 170.50-176.50 rupees a kg

 –Zinc seen at 274.0–280.0 rupees a kg



US$1 = 79.04 rupees

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


Edited by Namrata Rao



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Source: Cogencis

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