The LME three-month base metals market saw significant swings this week, with volatility ranging from 3-8% which reflected the downward correction in the nickel market by up to $2,437/t w-o-w, SteelMint data show.
High inflation rates the world over not only weighed on purchasing power and lending rates but also weakened fundamental sentiments across major nations followed by reserve banks policy changes.
On the other hand, persistent low inventories at LME-registered warehouses owing to continuous hike in energy prices, especially in Europe, may open up import opportunities, particularly for the largest recycled base metal – aluminium.
The Indian market remained tepid due to prevailing weak sentiments in the global market fuelled by inflation rate hikes. RBI increased repo rates by 50 basis points to 4.9% on 8 June 2022.
Re-emergence of COVID-19 cases in China, the biggest base metals consumer, impacted regular transactions across major exchanges and futures markets slowed down despite lower stock levels.
Base metals market highlights:
Aluminium
SteelMint’s assessment for domestic aluminium tense scrap stood at INR 163,000/t ($2,085/t) exy-Delhi yesterday, down INR 1,000/t ($13/t) w-o-w. Meanwhile, ADC12 alloy ingot prices stood at INR 205,000/t ($2,622/t) exw-Faridabad, stable w-o-w.
LME aluminium three-month contract prices were down $98/t to $2,680/t on 10 June as against $2,782/t on 6 June.
Import prices of aluminium
Aluminium scrap import prices (tense, taint tabor and talk scrap) of Middle East-origin have increased up to $170/t, while aluminium extrusion scrap prices decreased by $60/t on week CFR Nhava Sheva. UK-origin aluminium wheel scrap decreased by $20/t, while aluminium zorba increased by $55/t CFR Nhava Sheva, w-o-w on 7 June, as per SteelMint assessment.
Notably, LME registered warehouses witnessed consistent lower inventories of aluminium, which fell by 23,150 t to 427,350 t as per SteelMint’s weekly assessment.
Nickel three-month contract prices down
The LME nickel three-month contract prices fell 8.21% to $27,264/t on 10 June as against $29,701/t on 6 June.
SteelMint’s assessment for stainless steel 304 grade scrap was at INR 151,000/t ($1,931/t) exy-Delhi, down marginally by INR 1,500/t ($19/t), while grade 316 scrap is assessed at INR 235,000/t ($3,006/t) exy-Delhi, stable w-o-w.
The domestic stainless steel market has slowly picked up after trading moved in a slow lane in the past one-two weeks due to the imposition of export duty on stainless steel finished products on 22 May and buying enquiries have started picking up gradually over the past few days.
Copper armature scrap prices fall 2.56% w-o-w
LME three-month copper contract prices went down 3.05% to $9,448/t on 10 June as against $9,745/t on 6 June.
SteelMint’s assessment for copper armature scrap stood at INR 701,000/t ($8,967/t) exy-Delhi yesterday, down by INR 18,400/t ($235/t) w-o-w.
Copper armature scrap prices fell in the domestic market throughout the week due to weak demand, owing to insufficient liquidity in the market, sources informed SteelMint.
LME, domestic zinc prices trend lower
LME zinc three-month contract prices trended downwards this week, falling 4.65% to $3,693/t on 10 June as against $3,873/t on 6 June.
SteelMint’s assessment for special high-grade (SHG) zinc ingots declined by INR 12,200/t ($156/t) to INR 330,000/t ($4,221/t) exw-Delhi on 10 June. The domestic market witnessed a decline in buying enquiries amid lack of liquidity in the market.
Negative LME sentiments led to domestic prices moving lower. It was observed that zinc ingot cash prices decreased on the LME by 4.04% to $3,755/t on 10 June as against $3,913/t on 6 June.
Moreover, primary zinc producer Hindustan Zinc Ltd. (HZL) also twice decreased special high-grade (SHG) zinc ingot prices by INR 9,600/t ($123/t) this week to INR 344,000/t ($4,400/t).
LME lead prices down 3% w-o-w
LME lead three-month contract prices trended lower by 3% to $2,148/t on 10 June as against $2,214/t on 6 June.
However, Domestic lead remelted ingot (99%) and primary lead ingot (99.99%) prices showed an upward trend on a weekly basis, up 3%. SteelMint assessed lead remelted ingot prices at INR 188,000/t ($2,405/t) and primary lead ingot prices at INR 205,000/t ($2,622/t).
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