LME base metals prices show positive trends; stocks witness mixed movements

Base metals prices on the London Metal Exchange (LME) showed positive trends except zinc. Aluminium witnessed the largest rise of 2.04% while the steepest decline was seen for zinc - 1.22%. Meanwhile, metal stocks at LME-registered warehouse showed a mixed trend. The largest outflow was seen in lead, which fell by 2.15% while the significant inflow was seen in zinc, which was up by 7.86%.

Aluminium prices rose driven by China's economic measures, anticipated US rate cuts, and regional conflicts. Production rose too reaching 3.68 mnt in July, while demand remains weak. Global output in June increased by 3.2% y-o-y to 5.94 mnt, with China leading in production growth.

COMEX market

Copper prices on COMEX rose by 1% to $8,844/t against the previous closing.

India market overview

In India's non-ferrous markets, BigMint's assessment of domestic copper armature scrap stood at INR 722,000/t ex-Delhi. Meanwhile, aluminium tense scrap prices have remained range-bound, with ex-Delhi NCR at INR 174,000/t and ex-Chennai at INR 175,000/t.

Meanwhile, India has seen a decline in imported aluminium scrap prices w-o-w today on range-bound LME prices. Prices for all grades have fallen by up to 1.6% this week, leading to market uncertainty and a cautious approach among market participants.

Global updates

RBA rules out near-term rate cut amid persistent inflation

The Reserve Bank of Australia (RBA) has decided against a near-term interest rate cut, maintaining rates at a 12-year high of 4.35% due to persistent core inflation. RBA's Governor has stated that inflation must decrease further before considering a cut, and markets adjusted expectations for November, now favouring a rate cut by December or early next year.

US economic outlook: Increasing recession fears

An unexpectedly weak US employment report and a high unemployment rate have renewed recession fears, challenging the Federal Reserve's soft landing hopes. Notwithstanding GDP growth was robust at 2.8% in Q2, and services sector indicators remain strong. Some measures of private-sector demand also show stability, suggesting ongoing economic expansion.

Reduction in work hours at Cobre Panama

The reduction in work hours at Cobre Panama following its suspension is unlikely to affect actual mine production significantly, as the mine is not operational. However, it may impact maintenance and security activities, potentially leading to slower upkeep and increased risks if not managed properly. The union will reduce work hours at the suspended Cobre Panama mine starting 15 August impacting overtime and Sunday shifts, according to a union leader.

LME listing for Congolese copper

China's CMOC and other miners are pursuing London Metal Exchange (LME) listing for copper from the Democratic Republic of Congo (DRC), which produced 2.7 mnt last year. If successful, DRC copper could enter LME warehouses in 2025. Securing LME listing could enhance production efficiency for CMOC's Tenke Fungurume (TFM) and other Congolese copper producers by providing better financing opportunities. It might also boost copper output as LME listing typically increases market access and stability.

Oil prices up

Oil prices are rising due to heightened Middle East tensions, which raise concerns about supply disruptions. However, weak demand - evidenced by lower Chinese imports and increased US inventories - keeps gains in check.

Brent oil futures were up 0.05% to $76.52 per barrel. Meanwhile, crude oil WTI futures fell marginally by 0.11% to $73.28 per barrel at the time of reporting.

Natural gas prices up

Prices of natural gas were recorded at $2.03/MMBtu, up by 1.34%.

Dollar index

The dollar index, which gauges value of the greenback against a basket of six different currencies, hovered at 103.02, which was up by 0.25%.

The rupee was recorded at INR 83.94 against the dollar, largely stable compared to the previous closing.