Base metals prices gain on LME barring nickel; stocks record mixed trends

Base metals prices on the London Metal Exchange (LME) mostly showed positive trends, with aluminium witnessing the largest gain of 2.32%. However, nickel declined by 1.19% to $15,944/tonne (t). Meanwhile, metal stocks in LME-registered warehouses recorded mixed trends, with zinc registering the largest outflow of 1.34%.

COMEX market update

Copper prices on the COMEX market increased slightly by 1% from the previous close, settling at $9,308/t.

India market overview

In India's non-ferrous markets, BigMint assessed domestic copper armature scrap at INR 733,000/t ex-Delhi. Aluminium tense scrap remained stable, with ex-Delhi-NCR prices at INR 174,000/t and ex-Chennai prices at INR 175,00/t.

Global market updates

China's aluminium output hits 22-year high

In August 2024, China's aluminium production surged to 3.73 million tonnes (mnt), the highest monthly output since 2002. This 2.5% y-o-y increase was driven by strong prices and stable profits, despite recent price declines due to softening demand. Smelters, particularly in Yunnan, maintained high production levels due to abundant hydropower. For the first eight months of 2024, output rose 5.1% y-o-y.

Alcoa to divest Ma'aden stake for $1.1 billion

US aluminium maker Alcoa will sell its 25.1% stake in the Ma'aden joint venture to Saudi Arabian mining company Ma'aden for $1.1 billion. The deal, which includes 86 million shares and $150 million in cash, is set to close in early 2025. This move aims to streamline Alcoa's portfolio and enhance financial flexibility. Post-transaction, Alcoa will retain a 2% stake in Ma'aden.

China's weak output and sales heighten need for stimulus

China's industrial output growth hit a five-month low of 4.5% in August, while retail sales grew only 2.1%, missing forecasts. With property sales and investment also declining and extreme weather disrupting growth, there is mounting pressure for stronger stimulus measures. Analysts, predicting that Q3 GDP will fall below Q2 levels, have called for swift policy actions to meet annual growth targets.

Fed's rate cuts to impact global markets

The Federal Reserve's anticipated interest rate cut on Wednesday will influence global markets significantly. A shift from the Fed, especially after four years of holding rates steady, could prompt other central banks to adjust their policies, impacting currencies and inflation. Global bond markets, closely tied to US Treasuries, may benefit, with yields on government bonds from the US, Germany, and the UK expected to fall for the first time since late 2023.

Oil prices decline

Oil prices largely reduced, with Brent crude oil futures recorded at $71.57/barrel. However, West Texas Intermediate (WTI) crude oil futures edged up by 0.10% to $68.72/barrel.

Natural gas prices edge down

Natural gas prices were recorded at $2.27/metric million British thermal unit (MMBtu), down by 1.4%.

Dollar index drops

The dollar index, which measures the value of the greenback against a basket of six major currencies, hovered at 100.87, down slightly by 0.26%.

The Indian rupee was recorded at INR 83.89 against the dollar.