Most LME base metals prices gained driven by strong macroeconomic indicators from the US and China, with the exception of lead, which experienced a decline by the end of trading on Tuesday, 2 April 2024. Meanwhile, stocks at LME-registered warehouses witnessed varied trends.
Three-month aluminium futures inched up by 1.8% to $2,380/tonne (t), while nickel prices were at $17,030/t (up 1.6%). Copper prices settled at $8,991/t, while zinc edged up by 1.6% to $2,479/t. Lead prices dipped 1.7% to $2,020/t.
Aluminium prices surged driven by higher premiums in Japan, robust economic data from China and the US, expectations of increased production in May, and escalating Russia-Ukraine tensions. Operating rates rose due to peak season demand and policy support, while disruptions like power outages may affect output.
COMEX market
Copper prices on the Commodity Exchange (COMEX) stood at $8,915/t, slightly up by 0.2% from $8,894/t compared to the previous closing.
India’s non-ferrous markets
Aluminium
Imported aluminum scrap prices in India rose due to increasing LME futures prices and ongoing supply shortages. Nevertheless, trade activity slowed during the LME holiday and Ramadan period. A cautious attitude was seen among market participants, with scrap shortage leading to price hikes. Additionally, China’s silicon 553 prices dropped due to low demand.
Meanwhile, in the domestic market, tense scrap prices stood at INR 181,000/t, marking a slight 0.6% increase from the previous week’s INR 180,000/t ex-Delhi.
Copper
Yesterday, domestic copper prices increased slightly. Armature scrap prices were reported at INR 715,000/t and secondary rod prices at INR 759,000/t both ex-Delhi.
Global updates
Japan’s economy hits full capacity
Japan’s economic output returned to full capacity for the first time in about four years in the October-December quarter, with an output gap of +0.02%, a positive sign suggesting potential interest rate hikes. The Bank of Japan’s focus on this data signals a shift towards demand-driven inflation and market anticipation for further rate adjustments.
China’s services sector grows stronger in March
China’s services activity growth quickened in March, with the services PMI rising to 52.7 from 52.5 in February, signalling a tentative economic recovery. Despite improved business confidence and sales, employment levels decreased for the second month, indicating lingering sluggish demand.
Eurozone manufacturing slows; Spain, Italy show recovery
Eurozone manufacturing activity worsened in March, with the final PMI at 46.1, below the growth threshold for the 21st consecutive month. However, Spain and Italy showed signs of recovery, while British manufacturers saw growth for the first time in 20 months.
US factory orders rebound, job openings rise
US factory orders surged 1.4% in February, surpassing expectations, led by demand for machinery and commercial aircraft. The rebound signals a recovery in manufacturing, which struggled after interest rate hikes by the Federal Reserve. However, orders for computers and electronic products declined, and business spending on equipment remains a concern.
US job openings slightly rose in February, yet labour market conditions suggest a potential Federal Reserve interest rate cut by June. While job vacancies increased to 8.756 million, experts note slow progress in reducing labour demand. Job hires and resignations rose, while layoffs increased notably, particularly in arts, entertainment, and recreation.
Teck-Korea Zinc deal fee drops to 3-year low
Canadian miner Teck Resources has agreed to pay Korea Zinc $165/t – a three-year low – to process zinc concentrate into refined metal. The decrease in fees, known as treatment charges (TCs), reflects reduced mine output, with Teck’s fee dropping 40% from last year amid low zinc prices and mine closures.
Hyundai ends aluminium supply deal with Adaro
Hyundai Motor Co. and PT Adaro Minerals Indonesia Tbk terminated their aluminium supply agreement amid pressure from climate campaigners to avoid coal-powered production. Hyundai ended a non-binding MoU with Adaro, opting to explore other opportunities independently. Adaro plans to power its aluminium smelter with a hydropower plant.
Oil prices gain
Oil prices stabilised on Wednesday as investors monitored concerns regarding crude and fuel supplies, prompted by Ukrainian attacks on Russian refineries and the potential expansion of the Israel-Hamas conflict to involve Iran more directly.
Brent oil futures were up slightly by 0.09% to $87.00 per barrel. Crude oil WTI futures edged up by 0.01% to $85.16 per barrel at the time of reporting.
Natural gas prices dip
Prices of natural gas were recorded at $1.847/MMBtu, down 0.81%.
Dollar index
The dollar index, which gauges the value of the greenback in a basket of six different currencies, hovered at 104.74, slightly up by 0.07%.
The rupee was recorded at INR 83.42 against the dollar, depreciating marginally against the previous closing.