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India Base Metals: Up on LME, MCX as dollar falls ahead of US CPI

Informist, Tuesday, Sep 13, 2022

 

By Sandeep Sinha

 

MUMBAI – Futures contracts of all the base metals traded higher today on the Multi Commodity Exchange of India and the London Metal Exchange because of continued weakness in the US dollar, upbeat risk sentiment, and a rally in equity markets.

 

* The dollar index, which measures the strength of the greenback against a basket of six major currencies, fell 0.5% to 107.80 on fall in safe-haven demand and because of profit booking. A weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.

 

* The positive momentum was further supported by a decline in LME inventory of all base metals.

 

* “There is no doubt we are seeing systematic buy programs added to which the index offer which has weighed so heavily across the commodity landscape since mid-June and that first Fed 75bps hike has certainly dissipated since Friday,” Al Munro at broker Marex said in a note. “The removal of that sell pressure being a positive albeit the jury is out as to whether it returns for quarter end.”

 

* Investors will take cues from the US Consumer Price Index for August, due later today, as it may influence the quantum of the Federal Reserve’s interest rate hike.

 

* “The momentum has turned positive, there are challenges in the form of growth challenges and monetary tightening by major central banks which may limit upside,” Kotak Securities said in a report.

 

ALUMINIUM prices were up on supply woes as smelters in Yunnan province of China are operating at 20-30% capacity in view of lower hydropower generation due to drought. Short-covering of positions by traders on the domestic bourse and fall in LME stocks by 1,475 tn also supported the prices.

 

COPPER prices rose as the dollar continue to retreat and because of a fall in LME inventory by 1,775 tn.

 

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

 –Aluminium was at 202.50 rupees, up 1.3% 

 –Copper was at 669.55 rupees a kg, up 1% 

 –LEAD was at 180.30 rupees a kg, up 0.5%

 –ZINC was at 291.15 rupees a kg, up 1.8%

 

* Outlook for the evening session on MCX:

 –Aluminium contract seen at 200.0-205.20 rupees a kg

 –Copper seen at 662.0-675.0 rupees a kg

 –Lead seen at 177.0-183.60 rupees a kg

 –Zinc seen at 285.50–292.50 rupees a kg

End

 

US$1 = 79.14 rupees

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

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. 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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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