India Base Metals: Down on MCX, LME on profit booking, risk aversion

Informist, Friday, Jan 21, 2022


By Sandeep Sinha


MUMBAI – Future contracts of most base metals on the Multi Commodity Exchange of India and London Metal Exchange fell today due to profit booking and weak risk sentiment on prospects of the US Federal Reserve tightening monetary policy to curb inflation.


* Investors are now positioning for the US Federal Open Market Committee's meeting next week. Though the central bank is not expected to make any change to its monetary policy at the meeting, it may reaffirm its willingness to consider faster monetary tightening, Kotak Securities said in a report.


* Escalation of geopolitical tensions over speculation of Russia invading Ukraine, North Korea’s multiple missile tests amid stalled US talks, and attacks on supply trucks in West Asia further weighed on prices.


* However, all the main metal contracts are in backwardation, a condition in which prices for cash delivery are higher than futures – signalling supply constraints.


ALUMINIUM prices on MCX fell due to unwinding of long positions by traders. International Aluminium Institute on Thursday reported that global production of the metal rose 2.4% to 5.62 mln tn in December. 


COPPER contracts declined as global refined copper output jumped 1.4% to 20.59 mln tn for Jan-Oct, according to the International Copper Study Group. 


* At 1725 IST, on the MCX, the January futures contract of

 –Aluminium was at 242.1 rupees a kg, down 1.5%

 –Copper was at 751.4 rupees a kg, down 1.3% 

 —LEAD was at 184.9 rupees a kg, down 0.7%

 —NICKEL was at 1,785.8 rupees a kg, down 0.2%

 —ZINC was at 297.7 rupees a kg, up 0.8%


* Outlook for the evening session on MCX:

 –Aluminium contract seen 241.5-247.25 rupees per kg

 –Copper contract seen 749.5-762.5 rupees per kg

 –Lead contract seen 182-188.3 rupees per kg

 –Nickel contract seen 1,660-1,820 rupees per kg

 –Zinc contract seen 297.2–302.3 rupees per kg



US$1 = 74.41 rupees

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


Edited by Tanima Banerjee


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