LME base metals prices remain under pressure; Stocks witness outflows barring lead

On 1 February, 2024, base metals prices on the London Metal Exchange (LME) continued to remain under pressure. The three month prices on LME dropped by up to 1.9% with zinc witnessing the highest drop. Simultaneously, LME warehouse stocks saw outflows across various metals barring lead which recorded inflows by up to 5.1%.

Three-month aluminium futures fell by 1.4% to $2,247/tonne (t). However, nickel prices dipped by 0.2% to $16,230/t, copper prices settled at $8,534/t (down 0.8%), zinc edged down by 1.9% to $2,478/t and lead dropped by 0.3% to $2,151/t.

COMEX market

Copper prices on the Commodity Exchange (COMEX) dipped by 1.3% to settle at $8,469/t compared to $8,579/t in the previous closing.

India's non-ferrous market

Global updates

U.S. manufacturing shows stability in January

In January, U.S. manufacturing showed stability with the Institute for Supply Management's PMI rising to 49.1 from December's 47.1. It marked the 15th consecutive month below 50, indicating contraction. The forward-looking new orders sub-index rebounded, but inflation at the factory gate increased, reaching 52.9 from December's 45.2.

Global manufacturing trends in January 2024

Global manufacturing had a mixed start in 2024, with the U.S. showing signs of recovery, Eurozone easing its downturn, and Asia facing challenges. The U.S. Institute for Supply Management's PMI increased, indicating potential easing in the manufacturing sector. Eurozone's PMI improved for a third month, while the Asian picture varied, with South Korea expanding and Japan facing an eighth monthly contraction. The global outlook remains uncertain, with inflation and supply chain disruptions impacting recovery.

China's home prices signal sector recovery

China's new home prices experienced the fastest monthly increase in nearly 2.5 years, with a 0.15% gain in January, signalling a potential slowdown in the property sector's decline. Government land sales also increased for the first time in two years in December, rising 1.8% y-o-y, indicating the impact of policies to support the real estate market.

US job growth slows, economy resilient in January

The U.S. job growth in January likely experienced a slight slowdown as a resilient economy encouraged businesses to retain employees. The Labour Department's report may impact market expectations of a March interest rate cut, with solid annual wage growth expected to persist. Federal Reserve Chair Powell noted interest rates had peaked.

UK manufacturing contracts for 18th month, shipping delays persist

UK manufacturing, facing an 18th consecutive month of contraction, recorded a January PMI of 47.0, a two-month high but below the preliminary estimate. Weak new work inflows, inventory reduction efforts, and supply chain delays contributed to lower output. Shipping disruptions in the Red Sea extended delivery times from east Asia by at least 12-18 days. Input costs rose sharply, while output prices increased as manufacturers passed on higher costs.