Non-ferrous metals prices on LME show downtrend barring lead
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Prices of non-ferrous metals on the London Metal Exchange (LME) moved southward except lead. Three-month aluminium futures fell by 0.1% to $2,177/t, nickel prices went down marginally by 0.05% to $18,593/t, copper prices edged down by 0.08% to $7,970/t, zinc prices dipped by 1% to $2,421/t. Contrastingly, lead prices gained by 0.2% to $2,078/t. Similarly, metal stocks in LME-registered warehouses also witnessed mixed trends. Notably, the stocks of lead have witnessed inflows and gone up by 9.7% to 105,625 t from 96,225 t.
At the LME seminar held recently, a poll indicated that copper holds the most upside price potential next year, with 53% favouring it over other base metals. Despite optimism about copper's role in the energy transition, industry experts expect copper prices to fall in the short-term. The market faces challenges due to weak western demand, with supply-demand balance estimates revised by study groups such as the International Copper Study Group and the International Lead and Zinc Study Group.
Strong Chinese demand, driven by infrastructure spending on power grids, electric vehicles, and solar panels, is helping offset this downturn. However, exports of solar panels and EVs from China are facing pushback from the US and the EU. These mixed signals highlight the industry's struggle to transition from old to new cycles.
Supply surpluses loom for various base metals, and while stocks are still low, the decline in LME time-spreads suggests excess metal accumulation, mainly in off-exchange storage. While a rebuild of stocks could help in the long run, short-term price weakness is expected.
COMEX market
Copper prices on the Commodity Exchange (COMEX) rose marginally by 0.3% to reach $7,853/t from $7,875/t on the last trading day.
India's non-ferrous market
Aluminium
Imported aluminium scrap prices in India are declining due to limited trading activity and futures decreases. Materials from the Middle East are in higher demand, while the Indian rupee's depreciation is affecting buyers' costs. Sales of finished materials are slow, contributing to a decline in orders for alloy manufacturers. Multiple sellers in the western region have different prices for aluminium zorba grade scrap, leading to hesitancy among buyers. The market experiences fluctuations, and demand for imported silicon 553 remains limited due to slow sales of ADC12.
India's domestic aluminium scrap market has maintained stability yesterday. A shortage of funds and sluggish local demand are concerning market participants, leading suppliers to temporarily keep prices steady. Key market players' price reductions are also being closely monitored.
Copper
Indian domestic copper prices have remained stable within a range, as buyers exercise caution due to continued weak global demand. LME futures have experienced a 0.80% d-o-d decrease at the time of reporting, prompting sellers to reduce their prices.
Global updates
Strong U.S. retail sales boost economy
U.S. retail sales exceeded expectations in September, reflecting increased spending on motor vehicles and dining out. This strengthens beliefs that economic growth is surging in Q3. Goldman Sachs raised its Q3 GDP growth estimate to 4.0%, increasing the likelihood of a Fed interest rate hike in December or January. Despite concerns like higher borrowing costs and credit card delinquencies, strong consumer spending persists due to a tight labor market and accumulated savings from the pandemic.
China's Q3 GDP growth exceeds expectations, but property sector struggles
China's economy showed faster-than-expected growth in Q3, with GDP expanding by 4.9% y-o-y. This suggests that recent policy measures are supporting a tentative recovery, although challenges like the property crisis and other headwinds remain.
China's property sector continues to struggle, with property sales and investment experiencing double-digit declines. Although support measures provided temporary relief in tier-one cities, the overall sector faces challenges due to oversupply and low confidence. The property crisis has been a drag on China's economic growth and prompted an IMF downgrade of growth forecasts.
Oil prices surge
Oil prices witnessed a surge today, driven by escalating tension in the Middle East following a devastating explosion at a Gaza hospital that resulted in numerous casualties. These developments have raised concerns about potential disruptions in oil supply from the region.
Brent oil futures went up by 1.97% to $91.67 per barrel. Crude oil WTI futures gained by 2.27% to $88.63 per barrel, at the time of reporting.
Natural gas prices drop
Prices of natural gas were recorded at $3.076/MMBtu, down by 0.10% at the time of publishing this report.
Dollar index
The dollar index, which gauges value of the greenback in a basket of six different currencies, hovered at 106.15, witnessing a slight dip of 0.10%, at the time of reporting.
The rupee was recorded at 83.26 against the dollar, remained largely stable against the previous closing.
