Base metals prices and stocks on LME witness contrasting trends

Base metal prices on the London Metal Exchange (LME) witnessed mix trends. Three-month aluminium futures inched down by 0.4% to settle at $2,273/tonne (t), nickel prices gained 1.9% to $16,372/t, copper prices fell by 0.04% to $8,463/t, zinc edged up by 0.9% to $2,562/t, and lead rose by 1.7% at $2,076/t. LME-registered warehouse stocks witnessed outflows barring nickel.

U.S. job data reduced rate-cut expectations, and a strong dollar suppressed copper prices. Despite rising inventories, limited market circulation maintained firm prices. Anticipated pre-Chinese New Year stocking may boost demand amid price pressure.

Aluminium dropped influenced by China's December production estimate of 3.6 mnt, a 2.1% m-o-m increase. PBoC's CNY 350 billion injection and global alumina production decline also impacted prices.

COMEX market

Copper prices on the Commodity Exchange (COMEX) dipped slightly by 1% to $8,359/t from $8,447/t compared to the previous closing.

India's non-ferrous market

The domestic aluminium scrap market in India experienced a slight fall after primary players' and futures prices slipped.

Domestic copper prices remained almost stable as of the last trading day. Local buyers are exercising caution while buying as sellers are keeping their offers at the higher side.

Global updates

US services sector slows in December

In December, the U.S. services sector experienced a significant slowdown, as indicated by the Institute for Supply Management's non-manufacturing PMI dropping to 50.6 from November's 52.7. This marks the lowest reading in almost 3-1/2 years, with employment levels hitting their lowest point.

US employment beats expectations in Dec'23

In December, U.S. employers exceeded expectations by hiring more workers and increasing wages, challenging market predictions of a March interest rate cut by the Federal Reserve. Yet, the employment report revealed discrepancies, including fewer job additions in October and November and a decline in household employment.

Protests threaten first Quantum's Panama copper mine

First Quantum's Panama unit expresses deep concern over planned protests on Jan. 9 to occupy its closed copper mine. The union at Cobre Panama mine warned of the takeover plan by SUNTRACS union, demanding government intervention for site security amid past nationwide protests over the mine's controversial contract.

China's pivot to manufacturing sparks global trade tensions

As China's property sector falters, President redirects focus to manufacturing, emphasizing the "new three" growth drivers: electric vehicles, batteries, and renewable energy. This shift, while helping China evade recession, raises global trade tensions amid concerns over overcapacity and technological competition.

China's 2024 stimulus boosts copper

China is anticipated to intensify stimulus efforts in 2024, potentially boosting metal demand, especially for copper. As per secondary sources, the rising refined copper consumption in China, driven by economic stimulus, green energy projects, and possible government measures. Global copper supply disruptions in Chile, Peru, and Panama may further support prices, expected to rally, aided by a weaker dollar and anticipated rate cuts.

Honda mulls $13.83 billion EV plant in Canada

Honda is reportedly considering a near-2-trillion-yen ($13.83 billion) project to build an electric vehicle plant in Canada, potentially including in-house battery production. This could be one of Honda's largest investments. The company is exploring multiple sites, expecting a decision by year-end, with the plant operational by 2028.

VinFast invests $2 billion in India

VinFast, the Vietnamese EV manufacturer, has signed an agreement with the Tamil Nadu state in India for a $2 billion investment, with $500 million committed for the first five years. Construction of EV and battery plants is set to start in 2024, generating 3,000-3,500 jobs.

Oil prices dip

On Monday, oil prices experienced a decline of over 1% due to significant price reductions from leading oil exporter Saudi Arabia and an increase in OPEC production. This countered concerns related to the escalating geopolitical tensions in the Middle East.

Brent oil futures went down by 1.36% to $77.69 per barrel. Crude oil WTI futures fell slightly by 1.48% to $72.72 per barrel, at the time of reporting.

Natural gas prices dip

Prices of natural gas were recorded at $2.867/MMBtu, down by 0.97% at the time of reporting.

Dollar index

The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 102.43, slightly up by 0.02%, at the time of reporting.

At the time of reporting, the rupee was recorded at INR 83.07, appreciated against the previous closing.