Base metals prices on the London Metal Exchange (LME) witnessed varied trends with the highest change seen in aluminium prices amid increasing inventories. Similarly, the stocks at the LME registered warehouses saw mixed with the largest inflow seen in aluminium.
Aluminium stocks in LME warehouses surged by 88% to 903,850 t, with Trafigura delivering over 400,000 tonnes (t) for rent deals. Renting aluminium to LME-approved warehouses allows for lucrative financial arrangements, with rent fees shared between the warehouse and delivering companies, such as Trafigura.
COMEX market
Copper prices on the Commodity Exchange (COMEX) gained by 1.7% to $10,251/t against the previous closing.
India’s non-ferrous market
Throughout the week, domestic base metals markets experienced a downtrend barring zinc and lead. Imported aluminium scrap market also saw a downtrend. Meanwhile, domestic aluminium and copper prices saw a drop this week. On the other hand, zinc and lead prices moved up slightly.
Global updates
Japan’s Q1 economic contraction analysis
Japan’s economy likely shrank 1.5% annually in Q1, as per Reuters’ poll, hindering Bank of Japan’s rate hike plans. Key drivers slumped, with private consumption dropping 0.2%. Earthquakes and Toyota’s Daihatsu scandal impacted output. Capital expenditures fell 0.7%, while external demand dragged GDP growth down by 0.3%. CGPI suggests persistent inflation.
Fed officials debate interest rates
Debate among Federal Reserve officials intensified over U.S. interest rates’ adequacy amid rising inflation expectations. Some advocated a cautious approach, citing uncertainties, while others see room for rate hikes. The challenge lies in balancing price stability with economic growth.
China’s consumer prices rise, challenges persist
China’s consumer prices rose 0.3% in April for a third consecutive month, indicating improving domestic demand amidst policy support measures. Core inflation increased to 0.7%. However, declining producer prices and challenges in the manufacturing sector suggest sustained policy efforts are needed to stabilise the economy.
Oil prices dip
On Monday, oil prices continued to drop due to indications of sluggish fuel demand and remarks from U.S. Federal Reserve representatives that diminished expectations of interest rate reductions. Such rate adjustments could potentially curb growth and constrain fuel demand in the largest global economy.
Brent oil futures were down slightly by 0.13% to $82.68 per barrel. Crude oil WTI futures edged down by 0.10% to $78.18 per barrel at the time of reporting.
Natural gas prices steady
Prices of natural gas were recorded at $2.252/MMBtu, remained largely stable.
Dollar index
The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 105.30, remaining stable.
The rupee was recorded at INR 83.52 against the dollar, depreciating marginally against the previous closing.