Volatility continues in base metals; China's new infra projects announcement lend some support

Base metals prices on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) continued their volatile trend in the last trading day.

Some metals, however, were supported by expectations of strengthening demand in China with Shanghai on Tuesday announcing eight infrastructure projects with total investments of 1.8 trillion yuan ($256.83 billion) to revive a Covid-impacted economy.

Fed likely to hike interest rate

The Fed is expected to raise interest rates by at least 75 basis points (bps) at the conclusion of a two-day meeting later today. This will be the bank's fifth hike this year, as it moves to temper runaway inflation in the country. But the move will tighten monetary conditions in the USA, which is expected to weigh on economic activity and in turn on oil demand.

Base metals market performance - 20 September

• SHFE copper lost 0.72%, aluminium slid 0.43%, lead added 0.3%, and zinc lost 0.12%.
  
  
• LME's three-month copper futures were up 0.06%, nickel up 1.50%, aluminum down 0.27%, zinc decreased by 0.38%, and lead down by 0.21%.
  
  
• MCX aluminum remained almost stable, nickel increased 2.66%, lead down 0.11%, copper down marginally 0.32% and zinc fell slightly 0.78% d-o-d.
  
  

Stock levels mostly down

Most base metals stocks at LME-registered warehouses decreased by up to 7.70% d-o-d in the last session. However, copper stocks increased by 1.97% while aluminium remained almost stable.

Oil prices fluctuate

Brent oil futures were up by 2.9% at $91.65 per barrel and crude oil WTI futures were down marginally by 1.42% at $84.14 per barrel at the time of reporting.

Currency exchange

The Indian rupee was trading at 79.94, depreciating 0.35 paise against the greenback at the time of reporting.

The dollar index, which gauges the value of the dollar in a basket of six different currencies, hovered at around 110.64, up by 0.39% against the last session.