India Base Metals: Most down on demand worries, rising stocks

Informist, Monday, Aug 14, 2023


By Sandeep Sinha


MUMBAI – Futures contracts of most base metals fell today on the Multi Commodity Exchange of India and the London Metal Exchange due to concerns about demand from top metal consumer China and rising inventory at LME warehouses.


"Concerns over liquidity of one of the China's biggest property developers, Country Garden Holdings Co, brought back into the focus the troubled property sector. Any failure to pay its debt would hurt already fragile sentiment," said Daniel Hynes, senior commodities strategist at ANZ Research, in a note.


"There were also signs of weakening demand across the broader economy, with loan growth increasing in July by the smallest amount since the financial crisis," Hynes said.


"The base metal basket is anticipated to move in a tight range with a neutral to bearish trend amid sluggish global demand and weak fundamental cues," said Saumil Gandhi, senior analyst – commodities at HDFC Securities.


ALUMINIUM prices fell because of rising Russian-origin stocks at LME-accredited warehouses. "The large share of Russian aluminium sitting in LME warehouses will raise concerns over whether LME aluminium prices are increasingly reflecting the price of Russian-origin aluminium," ING Economics said in a report.


COPPER prices bucked the trend and traded higher because of short-covering after a sharp fall in the past few sessions. However, the upside was limited due to rise in stocks at LME-registered warehouses by 475 tn to 85,375 tn, the highest since Jun 19.


LEAD contracts fell due to a rise in stocks by 250 tn at LME-approved warehouses. Traders increasing their short positions on the domestic exchange also hurt the prices.


ZINC contracts slipped because of an increase in stocks by 375 tn at LME-accredited warehouses and concerns related to the Chinese property sector.


* At 1650 IST, on the MCX, the August futures contract of:

–Aluminium was at 197.30 rupees a kg, down 0.5%

–Copper was at 726.05 rupees a kg, up 0.1%

–Lead was at 182.60 rupees a kg, down 0.4%

–Zinc was at 214.10 rupees a kg, down 1.5%


* Outlook for the evening session on the MCX:

–Aluminium contract seen at 194.0-201.50 rupees

–Copper seen at 721.0-732.0 rupees

–Lead seen at 181.80-183.20 rupees

–Zinc seen at 211.0–219.0 rupees



US$1 = 82.95 rupees

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


Edited by Ashish Shirke


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