India Base Metals: Most up on improved risk-on mood, China PMI data

Informist, Thursday, Jun 1, 2023

By Sandeep Sinha

MUMBAI – Futures contracts of most base metals rose today on the Multi Commodity Exchange of India and the London Metal Exchange because of improved risk sentiment, better-than-expected economic data from China, and a weak dollar. However, further upside in the base metals prices in the domestic market is limited due to a sharp appreciation of the rupee against the dollar.

China Caixin Manufacturing Purchasing Managers’ Index rose to 50.9 in May from 49.5 in April, the highest in 11 months. A reading above 50 indicates expansion in economic activity and a figure below 50 signals contraction. The country is the biggest user and consumer of non-ferrous metals.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 104.08 on profit-taking. A weaker greenback makes dollar-denominated commodities such as non-ferrous metals cheaper for holders of other currencies.

Investors will look forward to the release of US Institute of Supply Management PMI and Automatic Data Processing non-farm payrolls report, due later today, for further cues. They also await official US April non-farm payrolls report, due Friday, for further cues.

ALUMINIUM prices rose due to a fall in stocks by 700 tn at the LME-approved warehouses and buying by commodity trading advisers.

COPPER prices gained because of a fall in output in top producer Chile by 5.2% on month to 417,300 tn in April and increasing optimism over US debt deal.

LEAD contracts fell as traders increased their short positions on the MCX.

ZINC contracts outperformed other base metals tracking gains in steel prices as the metal is used for galvanisation.

* At 1705 IST, on the MCX, the June futures contract of:

–Aluminium was at 208.30 rupees a kg, up 0.3%

–Copper was at 716.30 rupees a kg, up 1%

–Lead was at 182.60 rupees a kg, down 0.3%

–Zinc was at 208.75 rupees a kg, up 1.3%

* Outlook for the evening session on the MCX:

–Aluminium contract seen at 207.40-209.20 rupees

–Copper seen at 709.0-721.50 rupees

–Lead seen at 181.0-183.10 rupees

–Zinc seen at 206.0–210.50 rupees

End

US$1 = 82.40 rupees

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

Edited by Deepshikha Bhardwaj

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