Base metal prices on LME move upward barring aluminium

Non-ferrous metals prices on the London Metal Exchange (LME) experienced uptrend barring aluminium. Three-month nickel futures rose by 1.5% to settle at $16,747/tonne (t), copper prices rose 1.3% to $8,593/t, zinc prices edged up by 1.7% to $2,581/t and lead prices inched up by 0.2% to $2,064/t. Conversely, aluminium prices dropped by 0.9% to $2,262/t. Stocks on LME-registered warehouses witnessed mixed trends.

Zinc prices rose, supported by favourable Chinese industrial data and expectations of lower U.S. interest rates. Beijing and Shanghai, easing home purchase restrictions, alleviated concerns about China's property sector. Despite a 4.23% m-o-m decline in refined zinc output in November, the positive economic momentum, driven by strong retail sales and industrial output, contributed to the market's optimism.

COMEX market

Copper prices on the Commodity Exchange (COMEX) gained by 1% to $8,557/t from $8,469/t compared to the previous closing.

India's non-ferrous market

Aluminium

The Indian aluminium scrap market has seen a price surge due to rising futures contracts on the London Metal Exchange. Transactions are limited in the western region ahead of Christmas, with major participants unavailable. Non-ferrous scrap prices are tight in Europe and the US, leading to higher export offers. Slow accumulation in local markets has prompted suppliers to seek higher prices globally. Meanwhile, in the Indian aluminium scrap market, prices have remained steady yesterday.

Copper

Domestic copper prices remained largely stable as of 19 December 2023. In Delhi, secondary rod and copper armature scrap were priced at INR 709,000/t and INR 659,000/t ex-works, respectively.

Global updates

China holds rates, eyes easing

China maintained its benchmark lending rates at the expected levels, with the one-year loan prime rate at 3.45% and the five-year rate at 4.20%. Despite this, market observers anticipate further monetary easing in the new year to bolster the economy amid deflationary pressures.

Canada's inflation holds at 3.1%

Canada's annual inflation rate unexpectedly held steady at 3.1% in November, contrary to analysts' forecasts of a decline to 2.9% from October's 3.1%. This development led market players to adjust their expectations regarding the timing of potential interest rate cuts by the Bank of Canada. Travel tour prices offset slower growth in food prices, cheaper cellular services, and fuel oil.

Saudi Arabia's $2 trillion industrial revolution focus on metals and minerals

As per secondary sources, Saudi Arabia's industrial transformation, focusing on the Metals & Minerals sector as the third pillar of a US$2 trillion revolution. Vision 2030 strategically positions the aluminium industry, with investments of US$11.4 billion, and opportunities in automotive, defense, and aerospace. The commitment to Green Aluminium aligns with a NetZero target by 2060.

Funds turn bullish on copper: Macroeconomic confidence and supply worries

Funds are reducing bets on lower copper prices as macroeconomic concerns ease. Money managers are marginally net long on both the London Metal Exchange (LME) and CME contracts. The shift began in October when LME copper rebounded from potential breakdown, reaching $8,530/t. Expectations of the US rate tightening cycle passing its peak and signs of weaker copper supply contribute to the turnaround.

Despite analysts' bullish medium-term outlook, near-term supply concerns arise as China's smelters accept lower treatment charges, and major mines face closures or production downgrades. The consensus for a copper supply-demand surplus in 2024-2025 is unraveling, with a potential concentrates market deficit.

Oil prices range-bound

Dubai and Oman crude benchmarks in the Middle East reached their lowest levels since 2022 due to factors including low pre-holiday liquidity, weak demand from major buyers China and Japan, and an immediate Omani oil sale.

Brent oil futures went down by 0.08% to $79.17 per barrel. Crude oil WTI futures rose slightly by 1.34% to $73.44 per barrel, at the time of reporting.

Natural gas prices edge up

Prices of natural gas were recorded at $2.520/MMBtu, up marginally by 0.68%.

Dollar index

The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 102.19, up slightly by 0.02% against the last closing.

At the time of reporting, the rupee was recorded at INR 83.13, appreciated against the previous closing.