Informist, Tuesday, May 31, 2022
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India despite a negative London Metal Exchange cue due to sharp depreciation of the rupee against the dollar and hopes of a revival in demand from China after easing of COVID-19 restrictions in Shanghai from Wednesday.
* A weaker domestic currency makes dollar-denominated commodities expensive for domestic buyers.
* A sustained fall in the inventory at LME-approved warehouses supported the positive sentiment.
* China’s May manufacturing purchasing managers’ index rose to 49.6 from 47.4 in April. A reading below 50 indicates a contraction in the economy.
* Global alumina production fell 2.7% month-on-month to 11.06 mln tn in April, according to the latest data from the International Aluminium Institute. The output declined 4.7% on year.
* For further cues, market players await the release of India’s Jan-Mar GDP and Conference Board consumer confidence data later today.
* However, the upside in non-ferrous metals was capped by a firm dollar which snapped a three-day losing streak and recovered from a five-week low of 101.30 touched on Monday on safe-haven demand. A stronger greenback makes dollar-denominated commodities expensive for foreign currency holders.
* ALUMINIUM price fell on the MCX due to profit booking by traders. However, the downside was cushioned as LME inventory fell by 6,825 tn to 458,875 tn, the lowest since May 2001.
* COPPER contract rose on prospect of a recovery in demand in China. Traders raising fresh bets on the domestic bourse and a decline in LME stock by 5,450 tn also supported the prices.
* At 1725 IST, on the MCX, the June futures contract of:
–Aluminium was at 241.55 rupees, down 0.6%
–Copper was at 781.70 rupees a kg, up 0.1%
—LEAD was at 184.20 rupees a kg, up 0.1%
—ZINC was at 337.95 rupees a kg, up 1.5%
* Outlook for the evening session on MCX:
–Aluminium contract seen at 238.0-246.5 rupees per kg
–Copper seen at 774.0-786.0 rupees per kg
–Lead seen at 180.0-189.0 rupees per kg
–Zinc seen at 330.75–340.0 rupees per kg
End
US$1 = 77.64 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vidhi Verma
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