LME base metal prices slide, zinc drops by 3.2%
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On Wednesday, 17 January, London Metal Exchange (LME) base metals encountered broad downward pressure, with zinc notably witnessing a significant 3.2% decline as three-month prices concluded trading. The overall trend indicated a decrease in prices when compared to the previous day's closing values.
Three-month aluminium futures inched down by 1.6% to settle at $2,178/tonne (t), nickel prices dipped marginally by 0.4% to $16,079/t, copper prices settled at $8,268/t (down by 1.03%), zinc dropped by 3.2% to $2,466/t and lead decreased by 1.9% to $2,064/t. LME-registered warehouse stocks majorly witnessed outflows barring nickel.
The decline in zinc prices can be attributed to concerns about China's economic performance and the delayed interest rate cuts by the U.S. Federal Reserve. Worries intensified as China's economic indicators, notably a 23% decrease in property sales, raised apprehensions about the overall economic outlook.
COMEX market
Copper prices on the Commodity Exchange (COMEX) inched down by 0.8% to $8,205/t compared to $8,271/t the previous closing.
India's non-ferrous market
Aluminium
Aluminium ADC12 alloy ingot automobile equivalent spot prices remained stable at INR 190,000/t amid range-bound tense prices at INR 159,000/t exy Delhi, excluding GST, as per SteelMint's assessment.
The current spread between tense and ADC12 stood at INR 31,000/t exw Delhi. Imported tense scrap prices from the Middle East, particularly from the UAE, fell by $15/t to $1,640/t yesterday. Tense (6-7%) from the US was heard at $1,710/t, up by $15/t. The price for zorba 95-5 from the UK stood at $1,970/t, up $30/t w-o-w.
Copper
The prices in India's domestic copper market stayed relatively stable, maintaining a consistent range. Week over week (w-o-w), imported scrap prices also remained within a stable range. The cost of mixed motor scrap from the U.S. held firm at $1,145/t. Additionally, prices for brass honey scrap from the Middle East increased by 0.8%, reaching $5,370/t CIF Mundra.
Global updates
China's 2023 aluminium imports surge
In 2023, China's aluminium imports surged by 28%, reaching 3.06 mnt, fueled by robust demand and higher prices. The country's primary aluminium consumption was projected to grow by 3.9% to 42.5 mnt, driven by increased demand in the solar and auto sectors.
According to Customs, Russian aluminium shipments to China rose significantly, accounting for 77% of total imports in the January to November period. In December, China's overall aluminium imports increased by 25.2% y-o-y to 323,424 t. Additionally, bauxite imports, a key raw material for aluminium, rose 12.9% to 141.38 mnt in 2023.
BHP posts strong first-half copper production growth
BHP reported strong operational performance in the first half, with a notable 7% increase in copper production. The total copper production reached 894,000 t, marking a 7% rise. Escondida, contributing 528,000 t, experienced a 3% increase propelled by higher concentrator feed grade and throughput. Pampa Norte recorded a 6% growth, reaching 138,000 t. Spence achieved a half-year record of 127,000 t, with continuous plans for Tailings Storage Facility (TSF) remediation. Cerro Colorado entered a state of care and maintenance. Copper production in South Australia surged by 48%, reaching 154,000 t, while other copper sites, including Antamina and Carajas, maintained their production guidance for FY'24.
Antofagasta records 2% rise in 2023 copper production
Antofagasta disclosed a 2% uptick in copper production for the year 2023, reaching 660,600 t, which is attributed to enhanced water availability at Los Pelambres. The Chilean mining company intends to increase its capital expenditure to $2.7 billion in 2024, initiating construction on its Centinela concentrator. However, the 2024 production outlook remains at 670,000 to 710,000 t, falling short of analysts' previous estimates.
ECB interest rates predicted to be cut next quarter
It is expected that the European Central Bank (ECB) to cut interest rates in the next quarter, with June being the favoured month. Financial markets expect around 150 basis points of cuts in 2024, with the first reduction anticipated in April.
U.S. factory production improve in Dec'23
U.S. factory production in December showed a marginal increase of 0.1%, hindered by declines in machinery and electrical equipment, appliances, and components. Manufacturing output contracted at a 2.2% rate in Q4, partly due to the United Auto Workers' strikes. Excluding motor vehicles, manufacturing output dipped by 0.1%. Overall factory production rose by 1.2% y-o-y.
Oil prices up
Today, oil prices experienced an increase. This uptick was attributed to optimistic projections by OPEC regarding robust growth in global oil demand for the next two years. The market also closely monitored disrupted U.S. oil production caused by severe cold weather and observed geopolitical tensions in the Middle East as additional factors influencing the price movement.
Brent oil futures were marginally up by 0.36% to $78.16 per barrel. Crude oil WTI futures were up by 0.68% to $73.05 per barrel, at the time of reporting.
Natural gas prices dip
Prices of natural gas were recorded at $2.864/MMBtu, down by 0.21% 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 103.3, slightly down by 0.15%.
The rupee was recorded at INR 83.15 depreciated marginally against the previous closing.
