Base metals prices down on global downturn

Base metal prices on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) showed a downward trend on the last trading day.

The market has been showing negative sentiments amid worries that aggressive monetary policy tightening would slow the global economy, dampening demand for metals.

The US Federal Reserve delivered a hefty 75-basis point rate hike on 21 September and the Bank of England went for a 50-bp rise on 22 September to control inflation.

The Fed may raise the interest rate by another 100-125 basis points in the coming months and there has been rumor in the market that the rate hike will continue in 2023. The target of this round of interest rate hikes has risen from the previous 4.25%-4.5% to 4.75%-5%. The Fed’s hawkish attitude exceeded market expectations, and undoubtedly, the US dollar surged last Friday, 23 September.

Base metals market performance – 23 September

• SHFE copper fell 1.98%, aluminium lost 0.78%, lead gained 0.4%, and zinc dropped 1.77%.
• Meanwhile, LME’s three-month copper futures were down 3.22%, nickel down 4.6%, aluminum down 2.83%, zinc decreased by 3%, and lead down 2.54%.
• MCX aluminum was down by 3%, nickel decreased by 4%, lead edged down 1%, copper down 3% and zinc inched down 3%% respectively.

Stock levels fluctuate

Most of the base metals stocks at LME-registered warehouses decreased by up to 3.72% d-o-d in the last session. However, nickel and copper stocks increased by upto 1.59%.

Oil prices fall

Brent oil futures fell 3.5% to $85 per barrel and crude oil WTI futures were down 6% at $78  per barrel at the time of reporting.

Currency exchange

The Indian rupee was trading at 80.58, almost stable against the greenback at the time of reporting.

The dollar index, which gauges the value of the dollar in a basket of six different currencies, hovered at around 114, up by 0.73% against the last session.