Base metal prices on LME dip; Zinc hits fresh lows amid rising inventories

Base metals prices on the London Metal Exchange (LME) continued to remain on the lower side as of the last trading day. Three-month prices on LME dropped by up to 1.2% with the highest drop recorded in zinc amid a surge in inventories. Meanwhile, stocks at LME-registered warehouses witnessed varied trends.

The three-month copper contract on the LME also reached a three-month low following the discovery of a substantial copper deposit in Zambia by KoBold Metals, supported by Bill Gates.

On the other hand, zinc and lead futures reached fresh lows due to rising inventories, signaling subdued demand and oversupply in the market.

Three-month aluminium futures fell by 0.23% to $2,216/tonne (t), nickel prices were at $15,921/t (down 0.5%), copper prices settled at $8,169/t (down 0.2%), zinc edged down by 1.2% to $2,300/t and lead prices dropped by 1.07% to $2,032/t.

Notably, zinc stocks at LME registered warehouses witnessed an increase in inflow by 4.8% to 227,225 t. Meanwhile, lead stocks hit two year high to 150,675 t as per the data maintained by BigMint.

Shanghai Futures Exchange (SHFE) will remain closed until 17 February, 2024, due to the Lunar New Year.

COMEX market

Copper prices on the Commodity Exchange (COMEX) dipped by 0.5% to settle at $8,096/t compared to $8,140/t in the previous closing.

India's non-ferrous market

In the Indian non-ferrous metals prices mostly mirrored the global trend, staying predominantly lower as of the last trading day. Imported aluminum prices dipped, while domestic scrap prices increased due to limited availability in the northern market. Both copper and zinc markets experienced price declines, while lead prices remained relatively stable with minor fluctuations.

Global updates

Toyota's Daihatsu resumes production amid scandal

Daihatsu, a Toyota-owned carmaker, resumed part of its domestic production in Kyoto, Japan, after suspending operations due to a safety testing scandal. Production of additional models will restart on 26 February, following confirmation of meeting safety regulations by the transport ministry.

China's January aluminum ingot production up, electrolytic aluminum output down

In January 2024, domestic aluminum ingot production rose by 4.2% y-o-y to 3.562 mnt, while electrolytic aluminum output decreased by 24% to approximately 1.06 million tonnes. Operating capacity remained stable at around 42 million tonnes, with a predicted February production of 3.33 million tons, up 7.9% y-o-y.

Japanese manufacturers' profits surge on strong US sales

As per secondary sources, aggregate net profits of listed Japanese manufacturers surged over 20% y-o-y for the April-to-December period. The growth was driven by a robust U.S. economy, leading to increased sales in the auto and machinery sectors. Toyota Motor's net profit doubled, supported by strong sales in North America and implemented price increases. Profits in the machinery sector surged by 33%, with Komatsu achieving record profits for the second year in a row.

Minda Corp secures order, partners for smart key systems

Minda Corporation Ltd announced securing a significant order from a major Indian two-wheeler OEM for manufacturing smart key systems. Partnering with a Japanese firm, production will take place at their Pune facility, aligning with their commitment to advanced technology and tailored solutions. The move reinforces their position in vehicle access solutions amid growing demand for premium products.

Euro zone wage growth forecast

A new ECB forecasting tool indicates Euro zone wage growth may peak early this year but future trends remain uncertain. Wages are crucial for ECB's interest rate decisions. Forecasts suggest compensation growth could reach around 5%, but returning to 3% remains unclear.