LME base metal prices fall barring aluminium, amid strong US Dollar

Base metals prices on the London Metal Exchange (LME) experienced a downward performance barring aluminium during the closing of trading on Tuesday, 16 January. The majority of prices declined, primarily influenced by the increased strength of the US dollar.

The US Dollar Index reached 103.40 in its latest reading, reaching a peak of 103.41 during the day, marking its highest level since 13 December, 2023.

Three-month aluminium futures inched up by 0.5% to settle at $2,214/tonne (t). Meanwhile, nickel prices dipped marginally by 0.4% to $16,150/t, copper prices settled at $8,354/t (down 0.3%), zinc edged down by 0.4% to $2,547/t and lead decreased by 0.1% to $2,104/t. LME-registered warehouse stocks majorly witnessed outflows barring aluminium and nickel which was largely stable.

Aluminium prices rose by 0.5, buoyed by a positive Chinese economic news. Chinese export data for December showed stability, but annual exports dropped by 13.9%. The market is experiencing short covering.

COMEX market

Copper prices on the Commodity Exchange (COMEX) inched up by 0.5% to $8,271/t compared to $8,227/t the previous closing.

India's non-ferrous market

Aluminium

The Indian imported aluminum scrap market faced downward pressure due to falling LME futures and subdued demand. SteelMint noted moderate transactions, despite higher freight rates. Shifting dynamics led buyers to prefer Middle East and Far East origins. Domestic prices rose amid UK and US material sourcing, despite LME decline.

Meanwhile, in the domestic market, scrap availability slightly improved, but prices remained in a range-bound situation as of yesterday.

Copper

Global updates

China's primary aluminium output hit record high in 2023

As per the provisional data maintained by SteelMint, China's primary aluminium output hit a record 41 mnt in 2023, but the growth rate slowed to 3.7%, the third consecutive year of decline. Production faced constraints due to a government-set capacity cap, power shortages in the southwest, and weather-related disruptions in Yunnan. Future output is expected to rise to 42.7 million tons (mnt) in 2024, with new projects contributing. Overall, non-ferrous metals production, including copper, lead, zinc, and nickel, reached a record high of 74.7 mnt in 2023.

Australia's nickel industry grapples with challenges

Australia, the world's fifth-largest nickel producer, faced challenges as nickel prices plummeted, leading to mine closures and production cuts. Companies like First Quantum Minerals cut jobs and production, Panoramic Resources suspended operations, and IGO anticipated further impairments to its Cosmos nickel project. BHP is evaluating options amid the market downturn.

China's property market faces severe declines

China's property market saw the worst new home price declines in nearly nine years in December, with the steepest drop since February 2015. Despite government efforts, property sales fell by 23%, and developer investment saw its fastest y-o-y decline since 2000. The sustained downturn may impact China's broader recovery, prompting policymakers to consider further support measures.

Mitsubishi launches REMINE: Japan's recycling brand

Mitsubishi Materials Co., Ltd. unveiled Japan's first recycling brand, REMINE, featuring non-ferrous metal products with clearly stated recycled material percentages. The initial offerings include electrolytic tin (100% recycled) and electrolytic lead (99.6% or more). Verified by SGS Japan, the series adheres to ISO14021, emphasising recycling technology. The manufacturing plants aim to use 100% renewable electricity from FY 2024, aligning with sustainability goals and transparency in the supply chain.