Base metals prices on LME remain range-bound; Aluminium stocks hit 6-month high

Non-ferrous metals prices on the London Metal Exchange (LME) witnessed downtrend barring zinc and lead which remained stable. Three-month aluminium futures inched down by 0.4% to settle at $2,378/tonne (t), nickel prices dipped by 1.2% to $16,734/t and copper prices fell by 0.7% to $8,624/t. Meanwhile, zinc and lead prices remained stable at $2,641/t and $2,086/t respectively. Stocks on LME-registered warehouses witnessed mixed trends.

Notably, LME recorded a surge in aluminum and nickel inventories, reaching fresh highs. Aluminium stocks rose by 42,400 t in two days to 551,050 t, the highest since 19 June, with a 24% increase over the past two weeks. LME nickel stocks gained 7.3% in a day to 62,022 t, the highest since July 2022, surging by 34% this month. The influx is expected to include more Russian metal.

COMEX market

Copper prices on the Commodity Exchange (COMEX) dipped by 0.8% to $8,623/t from $8,689/t compared to the previous closing.

India's non-ferrous market

India's domestic aluminium, copper, zinc market activities remained volatile while prices witnessed a slight uptrend yesterday. However, lead prices remained largely stable.

SteelMint's assessment of tense scrap prices was INR 156,000/t (up 0.6%) while utensil scrap stood at around INR 168,000/t, ex-Delhi (excluding GST). Copper secondary rod and copper armature scrap were priced at INR 725,000/t and INR 684,000/t ex-works, respectively.

Zinc ingot prices were at INR 236,300/t (up 0.9%). Meanwhile, remelted lead ingot prices were at INR 178,000/t ex-Delhi.

Global updates

Japan's November factory output declines

Japan's November factory output dropped by 0.9%, less than the predicted 1.6%, with declines in auto and electronic equipment production. Motor vehicle production fell 2.5%, impacted by small cars and engines. Manufacturers expect a 6.0% December increase but a 7.2% decline in January.

METI maintained its assessment as "seesawing," monitoring global economic trends and rising prices. Toyota's Daihatsu unit's production halt due to a safety scandal is expected to further impact output from January. Retail sales in November grew 5.3% y-o-y, in line with forecasts, marking the 21st consecutive month of expansion.

Biden extends EU steel tariff suspension

President Joe Biden extended the suspension of tariffs on EU steel and aluminum for two years, aiming to facilitate negotiations addressing overcapacity and promoting low-carbon production. The move follows a TRQ system replacing Trump-era tariffs, with both sides making "substantial progress". The exemption applies until 31 December, 2025.

US mortgage rates hit low, unemployment claims rise

The interest rate on the 30-year fixed-rate U.S. mortgage decreased for the ninth consecutive week, closing the year at 6.61%, the lowest since May. After peaking in late October, rates have fallen by 1.18% points. The Federal Reserve's recent signal to halt rate hikes contributed to this trend.

Initial unemployment claims in the U.S. rose by 12,000 to 218,000 last week, signalling a cooling labor market in Q4. Continued claims increased by 14,000 to 1.875 million. With slower job growth and moderate inflation, the Federal Reserve has maintained its benchmark interest rate, signalling a potential end to its hiking campaign.

Antam sells subsidiary shares to CATL, advances Indonesia's EV industry

Indonesian miner Aneka Tambang (Antam) has sold $467.18 million worth of shares in two subsidiaries to China's Contemporary Amperex Technology Co (CATL) unit, Ningbo Contemporary Brunp Lygend. The sale gives CBL control of 49% of PT Sumberdaya Arindo and 60% of PT Feni Haltim. The move is part of a joint venture agreement to develop an electric vehicle ecosystem in Indonesia, including plans for a high-pressure acid leaching (HPAL) plant for nickel ore processing. Indonesia aims to produce 600,000 electric vehicles by 2030.

Oil prices range-bound

Oil prices are expected to conclude 2023 with a 10% decrease, marking the first annual decline in two years. This drop is attributed to geopolitical uncertainties, production reductions, and global efforts to curb inflation, leading to significant price fluctuations.

Brent oil futures went down by 1.58% to $78.39 per barrel. Crude oil WTI futures gained slightly by 0.52% to $72.15 per barrel, at the time of reporting.

Natural gas prices dip

Prices of natural gas were recorded at $2.525/MMBtu, down by 1.25% 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 100.83, down slightly by 0.15% against the last closing.

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