Base metals prices on LME show positive trends driven by US Fed rate cuts

Base metals prices on the London Metal Exchange (LME) exhibited positive trends in yesterday's session, with lead experiencing the largest rise of 1.8%. Meanwhile, metal stocks at LME-registered warehouses majorly witnessed outflows, except for zinc, which saw an inflow of 1.92% to 251,850 tonnes (t).

Prices of most base metals rose on Thursday, buoyed by the US Federal Reserve's rate cuts and expectations of additional stimulus measures in China. Chinese real estate shares rebounded following speculation of an imminent reduction in the Loan Prime Rate to revitalise the struggling housing market, a major consumer of industrial metals.

COMEX market update

Copper prices on the COMEX market remained stable from the previous close, settling at $9,380/t.

India market overview

Aluminium

India's spot prices of aluminium ADC12 alloyed ingots remained range-bound w-o-w in both the northern and southern regions, influenced by reduced demand and stable domestic raw material costs.

BigMint's benchmark assessments for the ADC12 (non-OEM) grade stood at INR 207,000/t in Delhi and INR 209,000/t in Chennai, showing minimal change w-o-w.

Copper

Domestic copper armature scrap prices edged down to INR 733,000/t d-o-d exy-Delhi. Prices on the LME remained range-bound at $9,427/t d-o-d. Secondary rod prices were at INR 782,000/t exw-Delhi.

Imported copper motor mix offers from the US stood at $1,180-1,190/t. Brass honey 4% Middle East-origin stood at $5,590/t.

Global market updates

Fed cuts rates to support employment

On 18 September, the US Federal Reserve cut interest rates by 0.50 percentage points, signalling a commitment to maintaining low unemployment as inflation eases. Chair Jerome Powell emphasised the need for proactive measures to support the labour market. The Fed projects further cuts, with the benchmark rate expected to reach 4.00%-4.25% by year-end.

Weak demand hinders green investment potential

Weak demand for green products is hindering up to $700 billion in investment for low-carbon projects in heavy-emitting industries such as aluminium and steel, according to the Industrial Transition Accelerator. Without firm buyer commitments for low-carbon goods, such as green steel, securing financing remains a major challenge for developers.

India's zinc demand set to surge

Zinc demand in India is projected to grow significantly by 2030, fuelled by emerging sectors such as green energy and battery technology, according to the International Zinc Association. With India being the fastest-growing economy, urbanisation and infrastructure development are set to create critical opportunities for zinc use, potentially reducing annual corrosion costs, which amount to nearly 5% of GDP. Additionally, the automotive sector is expected to see increased demand for galvanised steel due to the growing middle class and a desire for improved vehicles and longer lifespans.

Press Metal plans $750 million alumina refinery

Press Metal Aluminium Holdings Bhd plans to invest $750 million to establish an alumina refinery in West Kalimantan, Indonesia, in partnership with three local firms. The refinery aims for an initial annual capacity of 1-1.2 million tonnes (mnt), which would enhance the company's upstream operations and reduce reliance on third-party suppliers.