Weekly round-up: Base metals prices remain range-bound w-o-w

During the past week, the global base metals market witnessed a bullish trend, with prices of most metals on the London Metal Exchange (LME) remaining on the higher side w-o-w. Three-month aluminum futures gained 0.8% to $2,222/t, while nickel increased by 7.4%, settling at $22,307/t. Copper prices rose by 2.5% to $8,662/t, zinc also witnessed a rise of 5.3% to 2,497/t and lead prices edged up by 0.9% to $2,158/t.

Stock levels at LME warehouses reflected an overall increase except aluminum. Notably, the stocks of zinc and copper surged w-o-w to 99,150 t (up 9.3%) and 64,425 t (up 7.6%) respectively.

Rising US bond yields boosted the dollar index, causing a stall in base metals and a decline in precious metals. Copper showed resilience on Friday, supported by hopes of China's economic recovery. Zinc held onto gains, but potential changes in macroeconomic conditions might affect future price movements.

In response to the global market, the domestic base metals market remained range-bound w-o-w. Imported aluminum scrap and alloy ingot prices rose, while domestic scrap prices and primary ingot remained relatively stable. Similarly, Zinc and lead market also gained marginally amid an improved demand. However, copper prices dipped marginally w-o-w.

Aluminium market

The aluminium market showed an uptrend w-o-w. The positive movement in the domestic market can be attributed to the higher prices of three-month futures on the LME.

During the week, primary aluminium ingot (P1020) prices remained stable as the price revision of primary players in the market remained range-bound w-o-w contributing to the stability in the prices of primary aluminium ingots. SteelMint's assessment for aluminium ingot P1020 stood at INR 213,500/t, exy-Delhi, excluding GST.

Indian domestic alloy ingot market sees slight price rise due to higher futures and limited raw material supply. ADC12 aluminium alloy ingot prices remained firm at INR 186,000-187,000/t exw-Faridabad, excluding GST. Original equipment manufacturers (OEMs) showed moderate trade, buyers shifted to credit payments amid tight liquidity.

The local aluminium scrap market witnessed a slight rise in prices w-o-w after primary producers announced a price hike. Currently, tense prices stand largely stable at INR 155,000/t while taint tabor scrap prices are at INR 160,000, both exy-Delhi and excluding GST. The domestic market is facing tight supply of scrap specifically auto-casting scrap grade and taint tabor.

Global aluminium market

In the Indian imported aluminium scrap market, all grades of scrap experienced positive price trends, with prices increasing by up to $100/t w-o-w, according to SteelMint's assessment. The rise in futures led to an increase in offers, resulting in an improved trade activity and moderate buying inquiries in specific regions.

UK-origin Zorba 95-5 scrap was assessed at $1,780/t, up 1.8% w-o-w. Similarly, Middle East-origin tense prices were at $1,580/t (up 1.2%) CIF Nhava Sheva as of 25 July 2023.

Copper market

In the domestic copper market, prices remained relatively stable with a slight decrease w-o-w. Although there is a growing demand for copper, the market faces hurdles due to monsoon-related challenges and transportation issues.

Today, copper prices on the Multi Commodity Exchange (MCX) gained 1% reaching INR 744,000/t w-o-w.

SteelMint's assessment for armature scrap prices stood at INR 684,000/t, down 0.2% w-o-w. Primary rod prices rose by 0.2% to INR 750,000/t exw-Delhi, excluding GST.

In the imported market segment, prices of copper motor scrap originating from the US were recently noted at $1,120-1,130/t, reflecting firm levels, CIF Mundra.

A recent trade was concluded for four containers of copper mix motor scrap originating from the US at $1,120/t CIF Mundra, reflecting a marginal increase w-o-w.

Domestic zinc and lead markets

The demand for zinc and lead in northern markets were on the higher side w-o-w. India's special high-grade zinc prices gained w-o-w by 2%. Similarly, lead prices have also inched up by 1% w-o-w on an improving demand. Remelted lead ingot prices were assessed at INR 179,000/t.

Global macroeconomic developments

• The US real gross domestic product (GDP) grew at an annual rate of 2.4% in the second quarter of 2023.
  
  
• Global alumina production decreased by 5% m-o-m to 11.31 mnt in June 2023.
  
  
• Australia's Consumer Price Index (CPI) increased by 0.8% in the current quarter.
  
  
• Japan's economy is recovering moderately, with some downward pressure due to slower overseas recovery. Inflation is decelerating but expected to rise moderately later. Risks remain uncertain due to global and domestic factors.