Base metal prices and stocks on LME witness diverging trends

Non-ferrous metals prices on the London Metal Exchange (LME) experienced mixed trends. Three-month aluminium futures dipped by 0.9% to settle at $2,241/tonne (t), nickel prices rose by 0.6% to $16,854/t, copper prices edged down by 1.3% to $8,582/t, zinc prices inched down by 0.3% to $2,573/t and lead prices went up by 0.8% to $2,082/t. Stocks on LME-registered warehouses witnessed mixed trends as well.

Copper prices dipped due to a stronger dollar, despite positive factors like increased copper cathode imports in China and robust physical demand. The People's Bank of China maintained lending rates. Anglo-American revised copper production downward, and LME warehouse stocks increased by 8%.

COMEX market

Copper prices on the Commodity Exchange (COMEX) gained by 0.3% to $8,579/t from $8,557/t compared to the previous closing.

India's non-ferrous market

Aluminium

Aluminium ADC12 alloy ingot spot prices in India increased by INR 2,000/t to INR 183,000/t, tracking a rise in tense scrap prices by INR 1,000/t to INR 154,000/t ex-Delhi, excluding GST. Meanwhile, three-month aluminium futures rose to $2,260/t, with LME inventories at 511,450 t. Imported tense scrap prices from the UAE rose by $35/t to $1,575/t. The current spread between Tense and ADC12 is around INR 29,000-30,000/t.

Copper

Domestic copper scrap prices witnessed an uptrend in prices amid rise in future prices. On the other hand, mix copper motor scrap originating from the US also witnessed a rise in price by $70/t to $1,130/t, CIF Mundra.

Global updates

Japan raises economic growth forecast

Japan's government slightly increased its fiscal 2023/24 economic growth forecast to 1.6%, citing strong external demand offsetting weak domestic consumption. The outlook includes a rebound in inbound tourism and auto output, recovering from chip shortages. Private-sector economists expect 1.5% growth this year and 0.9% next. Overall inflation is projected to be 3.0% this fiscal year, slowing to 2.5% next year as energy subsidies fade. Nominal GDP is estimated to rise 5.5% this year.

Surprise rise in November's US home sales

In an unexpected turn, U.S. existing home sales rose by 0.8% in November, reaching a seasonally adjusted annual rate of 3.82 million units, breaking a five-month decline streak. However, the potential for further gains is constrained by a persistent shortage of available homes, even as mortgage rates ease from 23-year high.

China's November aluminium imports drop, exports surge

China's primary aluminium imports in November were 194,000 t, down by 10.3% m-o-m but up by 75.6% y-o-y. From January to November, imports totalled 1.367 mnt, a 153% y-o-y increase. November's domestic primary aluminium exports reached around 22,000 t, surging 3462% m-o-m and 812% y-o-y. The cumulative net imports from January to November were 1.232 mnt, up 257% y-o-y.

Antofagasta approves Centinela second concentrator project

Antofagasta plc has approved the construction of the Centinela Second Concentrator Project, aiming to add 170,000 copper equivalent tonnes per year. The $4.4 billion project will improve net cash costs, with the first copper expected in 2027. It involves a 95ktpd concentrator plant, HPGRs for energy reduction, and infrastructure expansions. Financing will involve direct funding and project finance, with execution of definitive documents expected in Q1 2024. Water supply outsourcing, if approved, could yield $600 million in cash and reduce project costs by $400 million. Construction begins after finance execution, targeting completion in 2027.

Oil prices dip

Today, oil prices experienced a decline, potentially ending a three-day upward trend. This drop was attributed to worries about reduced demand, prompted by an unexpected increase in the U.S. crude inventories, which overshadowed concerns about global trade disruptions arising from tensions in the Middle East.

Brent oil futures went down by 0.46% to $79.33 per barrel. Crude oil WTI futures dipped slightly by 0.53% to $73.85 per barrel, at the time of reporting.

Natural gas prices edge down

Prices of natural gas were recorded at $2.430/MMBtu, down marginally by 0.69%.

Dollar index

The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 102.31, down slightly by 0.10% against the last closing.

At the time of reporting, the rupee was recorded at INR 83.26, appreciated against the previous closing.