Informist, Monday, Jan 9, 2023
By Chinmay Mungse
MUMBAI – Futures of all base metals on the Multi Commodity Exchange of India and the London Metal Exchange rose today as the US dollar slipped against a basket of major currencies.
* The dollar index fell 0.1% to 103.71 as cooling non-farm payrolls data for the US weighed on the greenback. A softer greenback makes dollar-denominated commodities cheaper for holders of other currencies, boosting the demand for base metals.
* According to data released by the Labour Department on Friday, non-farm payrolls in the US slowed to a two-year low of 223,000, though still above market estimates of 200,000.
* Hopes of a slowdown in the pace of rate hikes by the US Federal Reserve also boosted the demand for base metals. Analysts expect the central bank to raise interest rates by 25 basis points at its February meeting as the job market has cooled down.
* Base metals were further boosted by China’s complete exit from COVID-19 restrictions from Jan 8. “Base metals jumped as demand prospects brightened after top consumer China reopened its borders,” Navneet Damani, vice president and head research – commodities and currencies, at Motilal Oswal Financial Services, said.
* COPPER contracts on the LME rose to a seven-month high of $8,802 per tn today, supported by a decline in copper output in Chile. Copper output in the world’s largest producer of the metal fell 6.9% to 449,000 tn in November.
* ALUMINIUM contracts on the LME rose to $2,372 per tn, the highest level in 2023, as stock of the metal at LME-accredited inventories fell by 7,975 tn to 428,525 tn.
* At 1710 IST, on the MCX, the January futures contract of:
–Aluminium was at 208.35 rupees a kg, up 1.7%
–Copper was at 747.20 rupees a kg, up 1.8%
–LEAD was at 189.85 rupees a kg, up 0.8%
–ZINC was at 278.70 rupees a kg, up 2.8%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 206.50-280.50 rupees a kg
–Copper seen at 745.0-758.0 rupees a kg
–Lead seen at 187.50-192.8 rupees a kg
–Zinc seen at 276.80–280.50 rupees a kg
End
US$1 = 82.36 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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