Base metals prices on the London Metal Exchange (LME) majorly remained on the lower side. The three month prices on LME dropped by up to 1.1% with zinc witnessing the highest drop. Simultaneously, LME warehouse stocks witnessed varied trends with the highest inflow recorded for lead.
Zinc prices fell, due to a 23.10% rise in Shanghai Futures Exchange-monitored inventories. Market sentiment weakened with a contraction in Chinese manufacturing, a stronger U.S. dollar, and Jerome Powell’s announcement against a March rate cut.
Three-month aluminium futures fell by 0.6% to $2,233/tonne (t), nickel prices was largely stable at $16,235/t, copper prices settled at $8,482/t (down 0.6%), zinc edged down by 1.1% to $2,451/t and lead dropped by 0.2% to $2,145/t.
COMEX market
Copper prices on the Commodity Exchange (COMEX) dipped by 0.8% to settle at $8,403/t compared to $8,469/t in the previous closing.
India’s non-ferrous market
Aluminium
In the Indian aluminium scrap market, tense prices rose amidst material shortages, contrasting with the decline in other scrap grades due to reduced demand and recent price cuts by primary producers as of the last trading day.
Copper
Domestic copper prices inched down amid a negative trend in futures prices. However, demand seems positive for raw material to finish material.
Zinc, lead
India’s domestic zinc and lead prices rose by up to 1.5% w-o-w, driven by a 2% increase in HZL’s ingot prices. In the imported segment, zinc diecast (5%) from the Middle East was assessed at $1,950/t, CFR Mundra.
Global updates
2024 base metals outlook: Weak demand foreseen
Base metals are anticipated to face a subdued 2024 due to weak demand, with only copper and aluminum expected to see modest increases of 2.8% and 2.1%, respectively. Nickel, despite strong demand from electric vehicles, is forecasted to suffer a 23% average price decline, as per secondary sources.
Adani Group unveils massive copper facility in Gujarat, aiming for 1 mnt output by 2029
Adani Group is constructing the world’s largest copper facility in Mundra, Gujarat, with operations set to begin by March. The $1.2 billion project by Kutch Copper Ltd, an Adani subsidiary, aims to produce 1 mnt annually by March 2029. India’s push towards renewable energy and electric vehicles is expected to double copper consumption by 2030.
China’s service sector moderates growth
China’s service sector grew at a slightly slower pace in January, with the services PMI slipping to 52.7 from December’s 52.9. Despite the moderation, it remained above the 50-mark indicating expansion for the 13th consecutive month. The economy faces challenges, including deflationary pressures and a housing downturn. New orders expanded at a slower pace, and business confidence for the year ahead was the lowest in three months. The composite PMI dipped to 52.5. Policymakers are urged to strengthen measures for effective economic recovery.
Japan’s service sector thrives in January
Japan’s service sector experienced its strongest growth in January since September, with the au Jibun Bank Service PMI reaching 53.1, surpassing December’s 51.5. The 17th consecutive month of growth was fuelled by robust demand and a weaker yen. New export business rose for the first time since August. Business confidence reached its highest level since May, contributing to an overall increase in private sector activity. The composite PMI climbed to 51.5.
Strong U.S. job growth in January
The U.S. job market exhibited robust growth in January, with a substantial increase of 353,000 jobs and the largest wage gains in nearly two years. The unemployment rate held steady at 3.7%, fuelling doubts about an anticipated interest rate cut in May.
Oil prices inch up
Oil prices slightly increased today, rebounding from significant declines the previous week. The rise was influenced by Washington’s commitment to carry out additional attacks on Iran-supported factions in the Middle East. Additionally, drones from Ukraine targeted the largest refinery in southern Russia, contributing to the upward movement of oil prices.
Brent oil futures were marginally up by 0.47% to $77.69 per barrel. Crude oil WTI futures were up by 0.36% to $72.54 per barrel at the time of reporting.
Natural gas prices up
Prices of natural gas were recorded at $2.093/MMBtu, up by 0.67%.
Dollar index
The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 104.02, slightly down by 0.09%.
The rupee was recorded at INR 83.02 against the USD, depreciating marginally against the previous closing.
