LME base metals prices positive; stocks witness mixed trend

Base metals prices on the London Metal Exchange (LME) mostly remained positive barring nickel as of yesterday's closing in anticipation of more supportive measures from China. Three-month prices on LME dropped up to 0.8%. However, nickel prices dipped 0.5%.

LME warehouse stocks witnessed varied trends, with the highest inflow recorded for lead.

Three-month aluminium futures rose by 0.8% to $2,230/tonne (t), nickel prices were at $15,925/t (down 0.5%), copper prices settled at $8,402/t (up 0.5%), zinc edged up by 0.5% to $2,432/t and lead prices were largely stable at $2,114/t.

Notably, lead stocks at LME registered warehouses witnessed an increase in inflow by over 3% to 134,925 t from 130,350 t.

COMEX market

Copper prices on the Commodity Exchange (COMEX) inched up by 0.3% to settle at $8,315/t compared to $8,294/t in the previous closing

India's non-ferrous market

Aluminium

The Indian market for imported aluminium scrap witnessed a significant downturn, with prices dropping by up to $140/t w-o-w, despite limited availability. Tense scrap from the UAE fell by $20/t, while US scrap prices decreased by $15/t. Uncertainties persist in bid-offer dynamics, keeping market players cautious. Meanwhile, aluminium futures are down by $50-60/t w-o-w, with LME inventories at 531,175 t. China-origin silicon 553 prices are at $2,070/t CIF Mundra, which are expected to remain stable until 16 February, aligning with the Lunar New Year.

Copper

Domestic copper prices continued to remain stable yesterday following MCX futures which remained almost firm. Demand remains positive for finished material.

Global updates

Codelco anticipates modest production increase

Codelco, Chile's leading copper producer, anticipates a modest production increase in 2024 after a decline to 1.325 million metric tons (mnt) in 2023, attributed to operational challenges. Despite a planned stoppage at the Chuquicamata mine, efforts are underway to enhance capacity and address project delays.

China's refined nickel imports decline

In 2023, China's refined nickel imports hit a near-decade low, reflecting a shift towards other forms of the metal from Indonesia. While nickel pig iron (NPI) remains a significant trade category, increasing Indonesian processing capacity now yields more diverse nickel products like matte and mixed hydroxide precipitate (MHP) for batteries. This transformation underscores Indonesia's pivotal role in global nickel production, as evidenced by its share of over half of global production.

UK construction sector optimistic

British construction firms turned optimistic as the prospect of interest rate cuts raised hopes for sectoral recovery. UK Purchasing Managers' Index improved to 48.8 in January, signalling potential turnaround despite challenges like higher shipping costs.

German industrial orders surge

German industrial orders unexpectedly surged in December, driven by a notable increase in aircraft orders, according to the Federal statistics office. While orders rose by 8.9% m-o-m concerns persist over the overall economic outlook amid declines in key sectors like automotive and mechanical engineering.

India's consumer goods growth slows

Consumer goods sector sales volume growth slowed in India's October-December quarter, primarily due to soft sales at smaller stores, despite rural areas narrowing consumption gaps with urban regions. Rural sales climbed 5.8%, while urban growth was 6.8%, marking a shift from previous quarters.

Oil prices inch up

Oil rose for a third consecutive day on Wednesday following reports indicating that U.S. oil inventories increased less than anticipated and the country substantially reduced its projection for oil production growth, alleviating worries regarding possible surplus.

Brent oil futures were marginally up by 0.09% to $78.66 per barrel. Crude oil WTI futures were up by 0.16% to $73.43 per barrel at the time of reporting.

Natural gas prices gain

Prices of natural gas were recorded at $2.014/MMBtu, up by 0.25%.

Dollar index

The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 104.11, slightly down by 0.1%.

The rupee was recorded at INR 82.97 against the USD, appreciating marginally against the previous closing.