Base metals prices contract amid rising US-China tensions

Base metals futures at London Metal Exchange (LME) and Shangai Futures Exchange (SHFE) lost by up to 2% against the previous closing following China's pronounced measures to clutch Taipei liberalisation which resulted in disturbed sentiments in the market, SteelMint learned.

Prices are seeing a downfall continuously for the past 2-3 days as tensions between the US and China flared.

Prices of base metals have fallen sharply as demand has dipped due to weak consumption from the key market China and also from the impact of monetary policies tightening around the world to battle rising inflation.

Base metals market performance - 3 August

SHFE copper dropped 0.79%, aluminium lost 0.71%, lead fell 0.1%, and zinc added 0.25%.

LME 3-month copper fell by 1.65%, aluminium lost 1.49%, lead inched down 1.22%, zinc fell 1.06%, nickel decreased by 0.71%.

MCX aluminium fell 0.40%, lead fell 0.36%, zinc up slightly by 0.94% and copper remained almost stable.

Stock levels remain negative

LME warehouse stocks of base metals fell a d-o-d basis in the last trading session. All base metal stocks fell by up to 1.65% yesterday, however lead stocks remained stable.

Oil prices rebound, still below $100

Brent oil futures rose 0.28% to $97 per barrel and crude oil WTI futures edged up by 0.44% to $91 per barrel at the time of reporting. However, prices are still below $100 owing to weak US fuel demand.

Currency exchange

The Indian rupee was at 79.56 against the US dollar. The dollar index, which gauges the value of the dollar in relation to a basket of six different currencies, hovered at around $106.32 at the reporting time.

The INR slumped by 69 paise against the dollar, marking its worst single-day fall, SteelMint noted.