Base metals prices on LME show varied trends; stocks witness mixed movements

Base metals prices on the London Metal Exchange (LME) exhibited mostly mixed trends, with aluminium prices witnessing the highest decline of 2.13%. Meanwhile, metal stocks at LME-registered warehouses also showed contrasting movements, with the largest outflow witnessed in copper, which decreased by 1.69% to 0.303 million tonnes (mnt).

COMEX market update

Copper prices on the COMEX market increased by 2%, settling at $9,536/tonne (t) compared to the previous close.

India market overview

In India's non-ferrous markets, BigMint assessed domestic copper armature scrap at INR 744,000/t ex-Delhi. Aluminium tense scrap remained stable, with ex-Delhi-NCR prices at INR 175,000/t and ex-Chennai prices at INR 176,000/t.

According to the latest data from the International Aluminium Institute (IAI), aluminium production in August 2024 remained largely stable, edging down to 6.17 mnt as compared to 6.19 mnt in July 2024. In contrast, production increased by 2% y-o-y from 6.08 mnt in August 2023. Notably, China, as the primary aluminium producer, maintained its output at 3.69 mnt in August 2024, unchanged from the previous month.

Global market updates

Fed rate cut pressures money market investors

The Federal Reserve's recent 50 basis points rate cut to 4.75%-5% is prompting investment advisers to recommend clients to reduce cash allocations in money-market funds, which have attracted $951 billion since 2022. With lower rates diminishing the appeal of these funds, investors may increasingly seek riskier assets for better returns, potentially shifting funds to equities and fixed-income holdings.

China maintains lending rates amid economic pressures

China unexpectedly kept its benchmark lending rates steady, surprising markets that anticipated cuts following the Fed's recent rate reduction. The one-year loan prime rate remains at 3.35%, while the five-year rate is at 3.85%. Analysts expect imminent stimulus measures to support the struggling economy, especially after disappointing August economic data, which raised concerns about meeting 2024 growth targets.

Nickel Industries acquires 51% stake in Siduarsi project

Nickel Industries has secured a 51% stake in the Siduarsi nickel-cobalt project in Indonesia, finalising the acquisition through a milestone payment of 4 million shares. The project has an initial mineral resource of 52 million dry metric tonnes (1.1% nickel and 0.1% cobalt). Nickel Industries can further increase its stake to 82.5% after completing an accepted feasibility study, with potential for 100% ownership following a third-party valuation. Shares dropped 0.9% to 84 cents at market open.

India's business growth slows to 9-month low

India's business activity growth dipped to a nine-month low in September, with the Composite Purchasing Managers' Index falling to 59.3 from 60.7 in August. While demand cooled slightly and costs rose, the services sector saw the fastest job growth in two years. Both manufacturing and services experienced reduced new business orders, impacting overall expansion, although activity remained robust above the 50-mark threshold.

Oil prices rose

Crude oil futures are climbing, driven by optimism following the Fed's interest rate cut and expectations of rising demand. A brief September dip below $70/barrel was quickly reversed, with market watchers noting the potential for further gains as demand strengthens. Geopolitical tensions also continue to influence sentiment.

Brent crude oil futures were recorded at $75.05/barrel, while West Texas Intermediate (WTI) crude oil futures edged up by 0.82% to $71.58/barrel.

Natural gas prices inch up

Natural gas prices were recorded at $2.47/metric million British thermal unit (MMBtu), up by 1.73%.