LME non-ferrous metals prices drop around 4% d-o-d

Prices of non-ferrous metals on the London Metal Exchange (LME) dropped by around 4% d-o-d. Three-month aluminium futures decreased by 1% to $2,173/t, while nickel fell by 3.5% to $20,056/t. Copper dipped 1.2% to $8,255/t, zinc was down by 1.6% to $2,349/t, and lead witnessed a drop of 1.2% to $2,071/t.

COMEX market

Copper prices on the Commodity Exchange market (COMEX) dropped by 1% to $8,227/t from $8,315/t in the last trading day.

India: Non-ferrous scrap market

Copper prices fall amid global downturn

India's copper market is facing a downturn as three-month copper futures on the LME dropped by $321/t till yesterday. Factors such as China's industrial firms experiencing an 18.8% profit decline and sluggish demand, despite limited inventories and positive future demand expectations, have impacted copper prices.

Domestic aluminium market

Limited demand and volatile global futures have impacted the aluminium alloy ingots market. OEMs have maintained production levels, while small- and medium-scale producers have either reduced capacity or stopped production temporarily due to market volatility.

Meanwhile, domestic aluminium scrap prices remain unchanged d-o-d today despite primary producers raising ingots prices. The market is experiencing subdued demand and low transaction volumes.

Global updates

China's factory activity contracts in June

China's factory activity likely contracted for a third consecutive month in June, albeit at a slightly slower pace, indicating the need for further policy stimulus to counter weak domestic and international demand. Analysts have downgraded their growth forecasts for the year, with Nomura being the most bearish, now expecting China's GDP to grow by 5.1% instead of 5.5%. The government has set a modest GDP growth target of around 5% for 2023 after missing its 2022 goal.

US new home sales soar, aluminum faces rate hike pressure

US new home sales surged by 12.2% in May, and the housing price index has edged up for three consecutive months. Durable goods orders have also increased. However, US interest rate hike expectations hinder aluminum price growth. Production resumption in Yunnan has added supply pressure. Aluminum stocks rose post Dragon Boat Festival, posing downside risks with limited decline due to low inventories.

Japan's retail sales surge

In May, retail sales in Japan rose by 5.7% y-o-y, exceeding market estimates of 5.4% and picking up pace after slightly lower growth of 5.1% last month. This was the 15th month in a row that retail trade increased.

Oil prices dip

Oil prices dropped on profit-taking amid concerns of interest rate hikes impacting economic growth and fuel demand. Weak economic data from China weighed on prices.

Brent oil futures as of today have dropped by 0.58% to $73.60 per barrel. Crude oil WTI futures also fell by 0.55% to $69.18 per barrel.

Natural gas prices stable

Prices of natural gas were recorded at $2.668/MMBtu at the time of publishing this report, largely stable against the last closing.

Dollar index

The dollar index, which gauges the value of the greenback in a basket of six different currencies, hovered at 102.56. The index inched up by 0.06%.

The rupee was recorded at 82.05 against the dollar, depreciating marginally against the last closing.