Bearish trends prevail in market on recession concerns
Nickel, copper prices continue downtrend
Base metals prices continued trending lower this week, as surging US inflation fuelled expectations of aggressive policy tightening and slowdown in economic growth, prompting fears of subdued demand.
The major impact was seen on prices of stainless steel and copper which remained highly volatile throughout the week. Nickel dropped below $19,000/t while copper prices fell to $7,100/t levels towards the end of this week, the lowest since late-November 2020. While copper prices peaked in March, muted demand from China triggered the price decline and spike in COVID-19 cases led to further downtrend.
The domestic base metals market remained negative as London Commodity Exchange (LME) prices remained subdued throughout the week. Cash prices and three-month future contracts of almost all base metals showed negative trends and settled at lower levels by the weekend.
The Indian rupee ended trading at 79.72 today and the USD is expected to rise further.
Aluminium scrap import prices drop
- All imported aluminium scrap (UK and Middle East-origin) prices fell this week in the range of $30-360/t. Middle East-origin imported aluminium talk scrap prices dropped by $360/t to $4,140/t CFR Nhava Sheva on 12 July.
- LME aluminium three-month contract prices were down 4% to $2,343/t on 15 July compared to 8 July.
Domestic aluminium prices rangebound
- Domestic aluminium scrap prices remained rangebound throughout the week amid limited trade observed in the market. Aluminium tense scrap prices were recorded at INR 149,000/t ($1,870/t) exy Delhi on 15 July.
Nickel downtrend continues
- LME three-month nickel contract prices fell sharply by 10% to $19,385/t on 15 July as against $21,581/t on 8 July. The sharp decline stoked fear in the market which resulted in a decline in stainless steel scrap prices. Market participants are expecting further correction in finished stainless steel prices due to muted demand.
- Domestic 304 grade stainless steel scrap prices were down 3.17% to INR 122,000/t ($1,530/t) exy Delhi on 14 July. The prices of 304 grade stainless steel HRC was recorded at INR 234,000/t ($2,935/t) on 12 July.
Copper prices slip
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- Domestic copper armature scrap prices were down 6.08% to INR 565,000/t ($7,087/t) exy Delhi on 15 July.
- Prices of copper primary and secondary were down by 6.77% and 5.54% on week to INR 620,000/t ($7,777/t) and INR 610,000/t ($7,652/t), respectively, on exw Delhi basis.
- The three-month copper contract prices on LME fell by 8% to $7,190/t on 15 July.
Zinc prices fall
Domestic special high-grade (SHG) zinc ingots prices fell by 4% w-o-w to INR 272,000/t ($3,412/t) exw Delhi on 15 July.
LME three-month zinc contract prices showed a negative trend this week, down by 6% to $2,915/t on 15July as against $3,099/t on 8 July.
Lead prices marginally down
Domestic remelted lead ingot prices showed a negative trend this week, falling 0.7% to INR 174,000/t ($2,183/t) exw-Delhi, on 15 July.
Prices of primary lead ingots were recorded at INR 184,000/t ($2,309/t) exw Delhi, down 1.7%.
The LME three-month lead contract prices inched down by nearly 1.4% from 8 July to $1,944/t on 15 July.
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