Informist, Thursday, Oct 14, 2021
By Sharathkumar Nair
MUMBAI – Base metal contracts traded higher today on the Multi Commodity Exchange of India and the London Metal Exchange as rising energy prices forced manufacturers to cut production, causing disruption in supply.
* The power crisis in China, caused by a severe shortage of coal forced authorities to ration power to industries. This forced many base metal manufacturers to scale down their operations. China is the top producer of metals. Base metals are produced through smelting process which consumes high energy and requires steady supply of power.
* To become a carbon-neutral country by 2060, China has imposed strict emission controls on its ALUMINIUM smelters. Aluminium smelting accounts for up to more than 4% of the total carbon emissions in China, website MINING-TECHNOLOGY said in a report.
* Power curbs and tight emission controls have forced aluminium smelters in China to cut their production. Supply crunch caused by low production of aluminium is driving prices higher in the global markets, analysts said.
* China reported the highest ever Producer Purchasing Index in almost 26 years. The PPI rose to 10.7% from a year earlier in September, data from National Bureau of Statistics showed.
* Increase in the price of raw materials could force Chinese manufacturers to slow their production, further pushing prices higher, analysts said.
* Rising electricity costs forced Belgium-based Nyrstar, a leading global producer of ZINC, to cut production by 50%. The company decided to shut three of its zinc smelting units across Europe saying it was no longer economically feasible to operate plants at full capacity.
* The three smelters are located in the Netherlands, Belgium and France. The production capacity of all the three combined is around 700,000 tn per annum.
* “If production were to be reduced for any prolonged period, this would presumably have a massive impact on the zinc market, which would then no doubt be seriously under supplied,” CommerzBank AG said in a report.
* On MCX, the most-active October zinc contract hit a lifetime high of 299.3 rupees per kg earlier today.
* Energy prices are on the rise globally as countries around the world try to revive economic activities which had been affected due to COVID-19.
* NICKEL prices rose on supply deficit. The global nickel market will witness a deficit of 134,000 tn this year, the International Nickel Study Group said in a report.
* At 1815 IST, on the MCX, the September futures contract of
–Aluminium was at 252.5 rupees a kg, up 2.6%
—COPPER was at 772.8 rupees a kg, up 1.8%
—LEAD was at 184.1 rupees a kg, up 1%
–Nickel was at 1,500 rupees a kg, up 1.4%
–Zinc was at 291.1 rupees a kg, up 3.1%
* Outlook for the evening session on MCX:
–Aluminium contract seen 241-282 rupees per kg
–Copper contract seen 753-796 rupees per kg
–Lead contract seen 177.6-216.1 rupees per kg
–Nickel contract seen 1,439-1,546 rupees per kg
–Zinc contract seen 277.4-316.2 rupees per kg
End
US$1 = 75.25 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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