LME base metals prices witness varied trends; aluminium stocks gain over 3%

Base metals prices on the London Metal Exchange (LME) displayed varied trends as of last closing. Similarly, stocks at the LME registered warehouses witnessed mixed trends with aluminium witnessing the highest inflow.

Three-month aluminium futures fell by 0.8% to $2,180/tonne (t), nickel prices were at $17,495/t (up 0.5%), copper prices settled at $8,567/t (down 0.2%), zinc edged up by 0.8% to $2,405/t, and lead prices gained by 0.3% to $2,095/t.

Notably, aluminium stocks at the LME warehouses rose by over 3% to 580,275 t from 560,675 t.

Aluminium prices declined, impacted by China's increased output. Despite stable operations expected for domestic aluminium companies in February-March, concerns persist over weak consumer demand, evidenced by a significant drop in new home sales.

COMEX market

Copper prices on the Commodity Exchange (COMEX) saw a marginal drop of 0.3% to $8,579/t compared to 8,601/t in the previous closing.

India's non-ferrous market

In India, imported and domestic aluminium scrap prices saw minor fluctuations, while on the primary market P1020 prices declined. Copper and zinc prices remained positive while lead prices remained largely stable.

Global updates

Alcoa proposes $2.2 billion acquisition

Alcoa, a U.S. aluminum producer, proposed a $2.2 billion all-stock acquisition of its Australian joint venture partner, Alumina, aiming to enhance its upstream exposure and streamline operations. The deal offers Alumina shareholders 0.02854 shares of Alcoa stock per share, providing a 31% stake in the combined entity. The move aims to capitalise on tax advantages and eliminate overhead costs.

Billionaire urges LME nickel categorisation

Australian billionaire proposed that the London Metal Exchange categorise nickel contracts as "clean" and "dirty" to offer consumers more options. This suggestion aims to support Australia's nickel industry, which is grappling with job losses and decreased prices amid heightened competition from Indonesian suppliers.

China's January home prices down 0.3%

China's January new home prices decreased by 0.3% m-o-m, a slower decline compared to December. Tier-one cities saw stabilisation, aided by support measures like reduced down-payments. Despite efforts to revive demand, overall market sentiment remains weak. it is anticipated that a prolonged recovery, noting increased household loans are primarily for personal consumption rather than property investment.

Changing Indian consumption habits revealed

Recent government data reveals shifting consumer spending patterns in India, with decreased allocations for staple foods like rice and wheat, and increased expenditures on processed foods, televisions, and refrigerators. Rural spending rose to INR 3,773 /month/person, while urban spending reached INR 6,459, reflecting changing consumption habits. The findings precede upcoming elections, highlighting economic challenges despite optimistic growth forecasts.