India Base Metals: Most down on firm dollar; Fed Powell speech eyed

Informist, Tuesday, Jan 10, 2023


By Chinmay Mungse


MUMBAI – Futures of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange were in the red today as the US dollar rose against a basket of major currencies. 


* The dollar index rebounded after falling to a seven-month low on Monday. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies, dulling the demand for base metals. 


* Hawkish comments from US Federal Reserve officials also dented the demand for base metals. 


* Raphael Bostic, president of the Atlanta Fed, and San Francisco counterpart Mary Daly separately said the central bank will likely need to raise interest rates above 5% before pausing and holding for some time. 


* A sell-off in COPPER contracts on the domestic and international bourses also weighed on prices. Copper prices on the MCX rose to a seven-month high of 754.45 rupees per tn on Monday and rose more than 3% on the LME. 


* "Copper may see limited downside as First Quantum Minerals Ltd plans to appeal an order by Panama's government to halt production at a massive copper mine as an agreement remains elusive," Kotak Securities said in a report. 


* Investors and market participants will be eyeing US Federal Reserve Chairman Jerome Powell's speech later today. Analysts are expecting Powell to provide cues on future rate hikes, which could determine the metal demand outlook. 


* At 1645 IST, on the MCX, the January futures contract of:

 –ALUMINIUM was at 210.45 rupees a kg, down 0.2% 

 –Copper was at 748.0 rupees a kg, down 0.5%

 –LEAD was at 188.8 rupees a kg, flat from the previous close

 –ZINC was at 279.85 rupees a kg, down 0.3%


* Outlook for the evening session on the MCX:

 –Aluminium contract seen at 209.0-215.50 rupees a kg

 –Copper seen at 744.0-752.0 rupees a kg

 –Lead seen at 186.0-191.50 rupees a kg

 –Zinc seen at 278.0–284.80 rupees a kg



US$1 = 81.79 rupees

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


Edited by Manisha Baxla


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