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India Base Metals: All down on weak economic data, recession fears

Informist, Thursday, Jun 30, 2022


By Sandeep Sinha


MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India and London Metal Exchange declined today as weak economic data from major countries and fears of a recession hit demand. 


* The US Jan-Mar GDP contracted 1.6% against a consensus estimate of a 1.5% contraction, according to the data released by Bureau of Economy Analysis today. 


* Japan’s industrial production fell 7.2% in May against an expected decline of 0.3%, registering the biggest fall in two years. This further weighed on metal prices.


* The sentiment was further soured by comments from Federal Reserve Chairman Jerome Powell, who said that the central bank won’t hesitate to raise interest rates to bring inflation under control even at the cost of growth.  


* “Recession concerns are spreading among market participants, suggesting weaker demand for metals,” Commerzbank AG said in a report. “Many metals markets have been better supplied in recent months, so that previously existing supply concerns have evaporated.”


* “Commodity trading advisers largely continue to build their short exposure with meaningful positions now seen on copper, aluminium and lead,” Al Munro at broker Marex said in a note.


* For further cues, market participants await speeches from Powell and European Central Bank president Christine Lagarde and US unemployment claims data later today.


ALUMINIUM prices fell due to weak downstream demand in China and traders increasing their short positions on the MCX. 


COPPER contracts slipped on worries of a slowdown in demand and prospect of interest rate hikes by major central banks.


* At 1730 IST, on the MCX, the July futures contract of:

 –Aluminium was at 208.65 rupees, down 1.3% 

 –Copper was at 695.60 rupees a kg, down 1.3% 

 —LEAD was at 174.50 rupees a kg, down 0.8%

 —ZINC was at 292.60 rupees a kg, down 2.3%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 206.0-212.50 rupees a kg

 –Copper seen at 693.0-705.0 rupees a kg

 –Lead seen at 171.0-180.0 rupees a kg

 –Zinc seen at 288.0–298.0 rupees a kg



US$1 = 78.96 rupees

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


Edited by Tanima Banerjee



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Source: Cogencis

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