LME base metals prices display mixed trend; lead stocks gain further

Base metals prices on the London Metal Exchange (LME) displayed mixed trends as of yesterday's closing. Simultaneously, LME warehouse stocks witnessed varied trends, with the highest inflow recorded for lead followed by zinc.

Three-month aluminium futures rose by 0.4% to $2,235/tonne (t), nickel prices were at $16,346/t (up 0.5%), copper prices settled at $8,197/t (down 0.7%), zinc edged down by 0.09% to $2,312/t, and lead prices gained marginally by 0.9% to $2,016/t.

Notably, lead stocks continued to witness inflows at LME registered warehouses. Lead stocks witnessed an inflow by over 3% at 168,727 t from 162,475 t.

Zinc registered a marginal gain, influenced by delays in Russia's Ozernoye mine, facing challenges like sanctions and a plant fire. Concerns persist due to weakened Chinese demand, reflected in rising zinc inventories on both LME and Shanghai Futures Exchange.

COMEX market

Copper prices on the Commodity Exchange (COMEX) inched down by 0.3% to settle at $8,139/t compared to $8,161/t in the previous closing.

India's non-ferrous market

Aluminium

Aluminium ADC12 alloy ingot spot prices in Delhi rose by INR 3,500/t w-o-w to INR 202,000/t, driven by a scarcity of tense scrap in north and south India. Producers are turning to substitutes like Zorba and Trump due to this shortage. The spread from Tense to ADC12 is now at INR 31,000/t, with mills moving towards a INR 35,000/t spread. Market participants anticipate further price increases.

Inquiries for ADC12 from the Pune region have risen, with prices lower in the south compared to the north. Imported Tense scrap prices from the Middle East increased, while aluminium futures remained range-bound.

Copper

Imported copper prices in India declined w-o-w due to the decrease in LME future prices. US mix copper motor scrap held steady at $1,145/t, while Middle East-origin brass honey (4%) dropped 2.1% to $5,300/t CFR Mundra, according to BigMint's assessment.

Global updates

SC proposes committee for Vedanta's copper smelter

The Supreme Court has proposed the formation of a committee to examine restarting operations at Vedanta's copper smelter in Tamil Nadu, emphasising national interest. Until its 2018 closure, India was a net copper exporter for two decades. The suggested Special Committee includes NEERI, IIT, TNPCB, CPCB, and environmental experts. Tamil Nadu opposes the committee due to Vedanta's past violations. Vedanta denies evidence of copper plant leakage.

Japan enters recession, cedes 3rd-largest economy status to Germany

Japan unexpectedly entered a recession at the end of last year, relinquishing its position as the world's third-largest economy to Germany. The downturn raises doubts about the central bank's exit from a long-standing loose monetary policy.

Weak demand in China, Toyota production halts, and sluggish consumption contribute to the economic challenges. The Bank of Japan's plan to phase out stimulus faces uncertainty amid consecutive GDP contractions, casting doubt on inflation and rate hike expectations.

BHP foresees $3.2 bn Samarco dam impairment

BHP, the world's largest listed miner, anticipates recording a $3.2 billion impairment for the Samarco dam failure and a $2.5 billion impairment for its Western Australia nickel business. These non-cash charges, revealed ahead of the company's half-year results, will not impact dividend payments. Last month, a Brazilian judge ordered BHP and Vale to pay up to $9.67 billion for the 2015 dam collapse.

Alba reports decline in profits

Aluminium Bahrain (Alba) reported a Q4 2023 profit of $62.2 million, down 40.7% y-o-y, attributing the decline to lower LME prices and premiums. For the full year 2023, Alba's profit was $313.9 million, a 71.6% y-o-y decrease.

Challenge of zero-duty aluminium foil imports

Hindalco Industries, part of the Aditya Birla Group, anticipates challenges due to the import of low-cost aluminum foils at zero per cent duty under recent free trade agreements. The removal of anti-dumping duty on foils has impacted Hindalco's packaging segment, with concerns raised about potential negative impact on the domestic industry.

Aurubis, Codelco join forces for sustainable copper production

Aurubis and Codelco have formalised an extensive collaboration agreement to advance sustainable copper production. With over 15 sub-projects, the partnership focuses on environmentally conscious practices, employee exchange programmes, and expanding commercial endeavours for Europe's renewable energy transition. The collaboration aims to set new benchmarks in sustainable copper production, inviting stakeholders to join in shaping a more responsible future for the industry.