Weekly round-up: Base metals prices exhibit downtrend w-o-w amid poor demand

Domestic base metals prices showed a downtrend for yet another week amid poor demand. On the other hand, recently released figures show inflation at eight-year high in April, which may trigger foreign direct investment (FDI) withdrawl which is a cause for worry for both equity and commodity markets.
The market saw weak transactions, influenced by soft sentiments in the global market amid lower operational costs in China owing to rising Covid cases.

Aluminium

Aluminium stocks rose by 32,000 tonnes w-o-w on the London Metal Exchange (LME)-registered warehouses. The domestic Indian base-metals market is influenced by the LME’s three-month prices and is largely linked with upstream industries where prices showed a downtrend w-o-w, SteelMint assessment shows.

LME aluiminium cash prices were down by 4% w-o-w which led to corrections in domestic scrap prices. SteelMint’s price assessment for aluminium tense scrap stood at INR 161,000/t ($2,078/t), falling by INR 7,000/t ($90/t) w-o-w exy-Delhi.

The impact of the pandemic on transportation has eased in many regions, but transportation in some areas is still hindered. Aluminium scrap recyclers are not very optimistic about the market in May, citing lower prices and demand, as well as inflows of non-standard ADC12 secondary aluminium alloy. SMM (Shangai Metals Market) expects transactions in aluminium scrap to decline in May.

Nickel

LME 3-month nickel prices drifted down around 9% this week which had major impact on domestic finished and scrap prices of stainless steel.

SteelMint’s assessment of stainless-steel grade 304 scrap was recorded at INR 174,000/t ($2,245/t), down INR 7,000/t ($90/t) w-o-w, and grade 316 scrap at INR 270,000/t ($3,484/t), down by INR 11,000/t ($142/t) w-o-w, exy-Delhi.

Copper

Copper prices, in terms of both cash and three-month contract, showed a downtrend. Notably, LME copper prices are hovering at around 4-month lows this week, the time since when data is being maintained with SteelMint.

The market saw weak transactions influenced by soft sentiments in the global market amid lower operational costs in China owing to rising Covid cases.

SteelMint’s assessment for copper armature scrap exy-Delhi stood at INR 697,000/t ($8,995/t), down INR 29,000/t ($374/t) w-o-w.

Zinc

LME zinc prices, in terms of both cash and three-month contract, showed a negative trend this week.

Steelmint’s assessment for special high grade (SHG) zinc ingots prices witnessed a downward correction by around 9.64% to INR 315,000/t ($4,065/t), exw-Delhi on 13 May 2022, w-o-w.

The drop in LME prices dragged down domestic Indian zinc prices. The market saw very few buying inquiries which also resulted in a fall in prices.

In addition, Chinese Regulator to Strengthen Supervision of Commodity Spot and Futures Markets and Crack down on Collusive Price Inflation: China’s Ministry of Industry and Information Technology recently issued a notice, which says that it will ensure the stable supply and price of bulk raw materials, use various means such as stockpiling, to strengthen the adjustment of supply and demand, and promote the stable operation of prices.