LME base metals prices decline amid surging stocks; Copper hits new low in 2024
...
Base metals prices on the London Metal Exchange (LME) continued to remain under pressure as of yesterday's closing. Three-month prices on LME dropped by up to 2.14% with the highest drop recorded in lead. Meanwhile, stocks at LME-registered warehouses witnessed inflows by over 4% barring copper.
Additionally, the three-month copper contract on the LME hit its lowest point of the year, leading a downward trend across the entire base metals segment.
Three-month aluminium futures fell by 0.05% to $2,221/tonne (t), nickel prices were at $16,007/t (down 0.03%), copper prices settled at $8,193/t (down 1.4%), zinc edged down by 3% to $2,327/t and lead prices dropped by 2.1% to $2,054/t.
Notably, zinc stocks at LME registered warehouses witnessed an increase in inflow by over 4% to 216,675 t.
Zinc prices dipped to a two-month low due to mounting inventories and concerns over the Chinese property sector. Trading activity was slow ahead of the Lunar New Year holidays in China.
COMEX market
Copper prices on the Commodity Exchange (COMEX) dipped by 0.8% to settle at $8,140/t compared to $8,205/t in the previous closing.
India's non-ferrous market
Aluminium
India's aluminium scrap market prices inched up due to material shortages and rising domestic demand, with tense scrap up by INR 500/t.
Copper
Domestic copper armature and secondary CCR rod prices in Delhi fell marginally by 1.1%. While primary CC rods decreased 0.9%, influenced by a 2.2% decline in LME prices. Imported scrap prices also fell by 2.6% w-o-w, impacting trade dynamics.
Global updates
China's Central Bank's flexibility pledge
China's Central Bank pledged flexible policies to boost domestic demand and ensure price stability amid economic recovery challenges and deflationary risks. Measures include prudent monetary policies, policy coordination, marketization of deposit rates, and support for the property market while maintaining a stable yuan exchange rate.
US trade deficit widens slightly in December
The U.S. trade deficit slightly widened in December but saw its largest contraction in 14 years in 2023, driven by declining imports and record-high exports. It is anticipated that, trade might continue supporting the economy in 2024, despite potential shipping disruptions and trade risks.
China resumes as a net zinc importer in 2023
In 2023, China resumed its role as a major importer of refined zinc following a temporary reversal in 2022. This shift was prompted by closures of western smelters and shipping complications, resulting in heightened premiums. Despite ongoing smelter challenges, western zinc demand remained subdued, allowing China to absorb excess supply. Similarly, China's refined lead trade inverted in 2022, with exports increasing in 2023, indicating a sustained change in trading patterns.
Canada Nickel Co seeks $1 billion for Ontario nickel processing plant
Canada Nickel Co plans to raise $1 billion for a nickel-processing plant in Ontario, aiming to become a key supplier for electric vehicle batteries. The plant, set to start production in 2027, aims to process 80,000 t of nickel annually, enhancing supplies from cleaner sources.
EGA alumina supply fuels UAE specialty industry growth
Emirates Global Aluminium (EGA) signed an agreement to supply alumina to The Alumina Industrial Company, facilitating the development of a specialty products industry in Abu Dhabi. The project aligns with UAE's Operation 300bn strategy to enhance industrial growth and aims to create jobs and reduce imports.
Oil prices inch down
Oil prices remained relatively stable on Friday, with minimal fluctuations, as they continued to show signs of weekly gains. Tensions in the Middle East persisted as Israel dismissed a ceasefire proposal from Hamas.
Brent oil futures were marginally down by 0.28% to $81.40 per barrel. Crude oil WTI futures were down by 0.17% to $76.09 per barrel at the time of reporting.
Natural gas prices dip
Prices of natural gas were recorded at $1.859/MMBtu, down by 3.03%.
Dollar index
The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 104.19, slightly up by 0.03%.
The rupee was recorded at INR 82.99 against the USD, depreciating marginally against the previous closing.
