Opening Bell: Base metals market update

Base metals prices on the Shanghai Futures Exchange (SHFE) and London Metal Exchange (LME) witnessed an upward movement amid positive sentiments as the dollar index continues to fall after hitting record highs in the past few days.

On the other hand, in certain parts of Europe, temperature has hit record highs, and heat waves and wildfires are spreading widely. It may result in the declaration of a climate emergency and push to take steps to fight climate change. This climate change may increase existing vulnerabilities and deepen socio-economic inbalances in Europe which may cause commodities market to show negative sentiments in the near term.

The margins of automobile companies have lowered in Q1FY23, as per reports. Covid restrictions in Shanghai forced Tesla to temporarily suspend or limit production at its factory there during Q2CY22.

Base metals market performance-

LME 3-month copper rose 1.4%, aluminium gained 1.7%, lead moved up 2.3%, and zinc rose 2%.

SHFE copper rose 0.62%, aluminium gained 1.01%, lead added 1.53%, and zinc jumped 1.02%.

MCX aluminium was up 0.9%, zinc up 1.6%, while copper gained 0.6% and lead rose 0.9%. Nickel inched down marginally by 0.9%, d-o-d.

Stock levels mostly down

LME warehouse stocks of most base metals fell up to 1.5% on a d-o-d basis in the last trading session, while zinc stocks rose slightly by nearly 0.24%.

Oil prices show marginal correction d-o-d

Brent oil futures fell 0.40% to $106 per barrel and crude oil WTI futures fell 0.57% to $99.31 per barrel at the time of reporting as recession fears weakened energy demand.

Currency exchange

The Indian rupee breached the significant exchange rate level of 80 against the US dollar yesterday. However, it recovered to 79.94 at the time of reporting.

The US dollar index slipped to $106.72 at the time of reporting, indicating easing market sentiments in the near term.