Weekly round-up: Base metals prices reveal mixed trends
Volatile trends prevailed in the global base metals market this week. Metals prices were impacted by weak consumption in China as well as surveys showing slow factory act...
Volatile trends prevailed in the global base metals market this week. Metals prices were impacted by weak consumption in China as well as surveys showing slow factory activity in the USA, Europe and Asia in July, fuelling fears of a recession and bleak demand outlook.
However, it is difficult to predict how the geopolitical relations between the USA and China will evolve over the coming days.
According to SteelMint data, global zinc price rose nearly 6%, resulting in a 10% increase in domestic prices, followed by lead, which rose 2% in both domestic and global markets, when the LME's three-month price trend is considered on a weekly basis. Despite a drop of up to 6% on the LME, positive trends were observed in the domestic market for nickel, copper and aluminium, with prices rising by up to 9%.
As inflation continues to remain at elevated levels, the Monetary Policy Committee (MPC) has increased the repo rates (the rate of interest charged by the central bank on the cash borrowed by commercial banks) by 50 basis points to 5.4% with effect from 5 August.
Aluminium scrap import prices rise
This week, all imported aluminium scrap prices (from the UK and Middle East) increased in the $25-140/t range. On 2 August, the price of Middle Eastern-origin imported aluminium talk scrap increased by $140/t to $4,350/t CFR Nhava Sheva.
However, compared to 29 July, LME aluminium three-month contract prices fell 2.66 % to $2,416/t on 6 August. A few European exporters told SteelMint that tight domestic supply might keep import prices supported this week.
Domestic aluminium scrap prices rangebound
Throughout the week, domestic scrap aluminium prices remained rangebound. On 5 August, aluminium tense scrap prices were recorded at INR 150,000/t ($1,890/t) exy-Delhi.
LME nickel falls, domestic prices stable
Domestic scrap nickel prices increased due to scarcity of scrap and reduced supply from abroad, as many recyclers suspended their operations in Europe for the holidays.
LME three-month nickel contract prices fell 6% to $22,216/t on 5 August compared to 29 July. On 4 August, domestic 304 grade stainless steel scrap prices increased by 8.9% to INR 129,000/t ($1,625/t) ex-Delhi.
The finished stainless steel market saw increased demand from industries such as automobiles and railways. As per Steelmint data, the price of 304 grade stainless steel HRC exw Mumbai stood at INR 239,000/t ($3,011/t) on 2 August.
Copper prices rise slightly
Domestic copper armature scrap prices increased by 3.9% w-o-w to INR 624,000/t ($7,862/t) exy Delhi on 5 August due to improved demand, which led to supply tightness keeping prices supported in the local markets.
However, the three-month copper contract prices remained volatile throughout the week, falling 0.69% to $7,870/t on 5 August compared to 29 July.
Zinc prices on the rise
Domestic special high-grade (SHG) zinc ingot prices increased by 10.3% w-o-w in response to the rise in the three-month LME prices. Prices increased to INR 316,000/t ($3,981/t) exw Delhi on 5 August. LME's three-month zinc contract prices rose 10.3% this week to $3,488/t on 5 August versus 29 July.
Lead prices edge up
Domestic remelted lead ingot prices increased this week to INR 179,000/t ($2,255/t) exw-Delhi on 5 August. Primary lead ingot prices were recorded at INR 193,000/t ($2,432/t) exw Delhi, up slightly by 2%. The LME three-month lead contract price rose by about 2% from 29 July to $2,070/t.
