Base metals 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 inched up by 3.7% to settle at $2,326/tonne (t), nickel prices dipped by 2.2% to $16,509/t, copper prices edged down by 0.2% to $8,573/t, zinc prices gained by 2.1% to $2,601/t and lead prices went down by 0.1% to $2,063/t. Stocks on LME-registered warehouses witnessed inflows barring zinc.

Shanghai and London nickel inventories diverged, as London recorded a one-year high of 56,058 t, while Shanghai saw a slight decrease to 13,300 t, still relatively high. The data reflects contrasting trends in nickel stockpiles between the two markets.

COMEX market

Copper prices on the Commodity Exchange (COMEX) dipped by 0.3% to $8,578/t from $8,601/t compared to the previous closing.

India's non-ferrous market

India's domestic aluminium scrap market activities remained volatile while prices remained stable towards the end of the week. The market is facing shortage of tense scrap in some parts of the northern region. Similarly, domestic copper market prices remained stable as well.

Global updates

US prices drop, fuels rate-cut expectations

U.S. prices saw the first monthly decline in over 3.5 years in November, pushing annual inflation below 3%, fueling expectations of a Federal Reserve rate cut in March. Despite economic resilience, analysts suggest a potential shift in Fed policy in the near future.

Japan service inflation steady, wages crucial

Japan's business-to-business service inflation held steady at 2.3% in November, signaling companies passing on higher labor costs. The Bank of Japan sees rising service prices as a key driver for achieving its 2% inflation target amid prospects for sustained wage gains. Governor emphasized the importance of next year's wage outlook for policy decisions.

Shanghai aluminium futures rise amid supply disruptions

Shanghai aluminium futures extended gains for the ninth consecutive session, rising 0.2% to RMB 19,250/t, driven by falling inventories in China and supply disruptions in bauxite production in Guinea. Concerns over alumina capacity cuts and lower aluminium supply, combined with reduced inventories in China, supported the upward trend.

Fatal nickel plant explosion raises concerns

A smelting furnace explosion at a Chinese-owned nickel plant in Indonesia's Sulawesi island resulted in at least 13 deaths and numerous injuries. The incident adds to a series of deadly events at nickel smelting plants linked to China's Belt and Road Initiative, crucial for global electric vehicle battery production.

Fed 2024 members hawkish, rate-cut expected

The U.S. Federal Reserve's 2024 voting members are slightly more hawkish than the outgoing group, but this doesn't alter expectations for an interest-rate cut in 2024. Analysts suggest that if inflation continues to decline, the Fed may opt for larger rate reductions than initially projected.

Oil prices gain

Brent oil futures went up by 0.34% to $79.35 per barrel. Crude oil WTI futures gained slightly by 0.39% to $73.85 per barrel, at the time of reporting.

Natural gas prices down

Prices of natural gas were recorded at $2.500/MMBtu, dipped by 4.21% 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 101.6, down slightly by 0.09% against the last closing.

At the time of reporting, the rupee was recorded at INR 83.16, appreciated against the previous closing.