Base metals prices show positive trends

Base metals prices on all major exchanges witnessed positive trends on 2 December, 2022.

Sentiment remained supported by more Chinese cities relaxing anti-Covid measures over the weekend. Economic hubs including Beijing and Shanghai both relaxed movement, given that the country is one of the biggest commodity importers in the world.

WTI crude futures edged above $81 per barrel on Monday after OPEC+ decided to maintain production at current levels as more Western sanctions on Russian oil are set to kick in, while easing Covid curbs in China buoyed the demand outlook.

OPEC+ decided to stick to their existing policy of reducing oil output by 2 million barrels a day from November through 2023, as the group took stock of market developments. The European Union is set to ban most seaborne Russian oil imports from 5-Dec 2022, while the G7 agreed to impose a cap of $60 per barrel on Russian crude.

Russia's Deputy Prime Minister Alexander Novak condemned the cap saying that Russia was willing to cut output if needed. On the demand side, more Chinese cities including Shanghai and Hangzhou have dialled back Covid restrictions over the weekend, raising hopes that the authorities are steering the country toward economic reopening that could boost energy demand.

Japan's service sector PMI falls

Japan's service sector activity grew in November at the slowest pace in three months, as relentless inflation dampened a part of the economy that was benefiting from the return of domestic and foreign shoppers and easing Covid restrictions.

The final au Jibun Bank Japan Services purchasing managers' index (PMI) fell to a seasonally adjusted 50.3 in November from October's 53.2, hitting the lowest since August, as per reports.

Base metals market performance

LME's three-months copper contract edged up by 1.4%, nickel rose 4.6%, aluminium was up 2.4%, zinc remained almost stable, while lead increased 1.3%.

SHFE copper gained 1.09%, aluminium added 0.6%, lead inched up by 1.11%, and zinc advanced 0.82%.

LME stock levels down

Base metals stocks at LME-registered warehouses decreased by up to 2.1% d-o-d in the last session; however, nickel stocks increased by 0.3%.

Oil prices fall slightly

Brent oil futures fell slightly by 0.60% at $86.27 per barrel, while crude oil WTI futures moved down by 0.83% to $80.54 per barrel at the time of reporting.

Dollar index

The dollar index, which gauges the value of the dollar in a basket of six different currencies, hovered around 104.16, down marginally by 0.36% against the last session.

The rupee was recorded at 81.45 against the US dollar, depreciating 0.45 paise against the last closing.