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India Base Metals: Copper up on demand hopes from China, weaker dlr

Informist, Friday, Jul 29, 2022


By Sandeep Sinha


MUMBAI – COPPER prices rose today and are on track to end the week with a sharp gain of nearly 5.5%, tracking weakness in the dollar and expectations of a revival in demand in top consumer China.


* The red metal, which is used in electricity and construction, has gained almost $900 since Jul 15, as investors took advantage of lower prices and a recovery in equity markets.


* The non-ferrous metal sentiment was further boosted after news agency Xinhua reported that China’s Politburo has abandoned the earlier growth target of 5.5% and will try hard to “achieve the best possible results for the economy this year”. The government is likely to announce support for the battered real estate sector to help revive it.


ZINC prices soared tracking fresh buying on the Shanghai Futures Exchange and improved sentiment for both ferrous and non-ferrous metals. The Shanghai Metals Market data showed that onshore social inventories declined to 31,800 tn from 32,700 tn, and London Metal Exchange stocks fell by 300 tn to 70,500 tn, which supported the positive cues.


* Investors will take further cues from the US core personal consumer price index–the Federal Reserve’s preferred inflation gauge–scheduled for release later today.


* The euro zone GDP rose by 0.7% in the Apr-Jun quarter from 0.5% in Jan-Mar due to a rebound in service sector activity.


* However, the sharp upside was limited after the US economy slipped into technical recession, with the Apr-Jun GDP contracting by 0.9% on year. It had dropped 1.6% in Jan-Mar due to a squeeze on consumer spending and a fall in residential construction. 


* The rupee rallied 0.63% against the dollar, and this also weighed on the price. A firm rupee makes commodities priced in dollars cheaper for domestic buyers.


ALUMINIUM prices are expected to rally due to a fall in LME inventory by 4,300 tn to touch a 32-year low of 291,025 tn. The metal’s price has been on a continuous slide since May 23 as European smelters have cut the output due to soaring energy prices.


* At 1640 IST, on the MCX, the August futures contract of:

 –Aluminium was at 213.30 rupees, down 0.1% 

 –Copper was at 646.90 rupees a kg, up 0.4% 

 –LEAD was at 176.80 rupees a kg, up 0.2%

 –Zinc was at 290.50 rupees a kg, up 2%


* Outlook for the evening session on MCX:

 –Aluminium contract seen at 209.20-217.0 rupees a kg

 –Copper seen at 637.0-654.0 rupees a kg

 –Lead seen at 173.70-178.20 rupees a kg

 –Zinc seen at 283.60–290.90 rupees a kg



US$1 = 79.25 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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