Weekly round-up: Domestic base metal prices dip following futures decline

At the close of trading on Friday, 26 July 2024, prices of base metals on the London Metal Exchange (LME) witnessed a negative trend.

On LME, three-month aluminium futures fell by 3.6% to $2,229/t, while nickel prices settled at $15,550/t. Copper prices were at $9,018/t, down by 2.13%; zinc fell by 4% to $2,609/t and lead prices fell by 3.29% to $2,031/t.

This week, domestic and global base metals markets witnessed a downtrend. Domestic aluminium scrap prices fell by 2% w-o-w. Meanwhile, imported aluminium prices saw a decline of 6% .

Aluminium

According to BigMint's assessment, tense scrap from the Middle East, particularly the UAE, saw a decrease of $80/t, settling at $1,790/t. Zorba 95/5 from the UK also decreased by $40/t to $2,000/t CFR West Coast, India.

Meanwhile, India's imports of aluminium scrap stood at 167,641 t in June 2024, moving up marginally by 4% m-o-m from the previous month's 161,644 t.

Market activity in India slowed after the presentation of the FY'25 interim Budget. Import duties for aluminium and copper scrap remained at 2.5%, while the Basic Customs Duty on silicon metal was reduced from 5% to zero.

ADC12

Spot prices of aluminium ADC12 alloy ingots (non-OEM) in Delhi NCR and Chennai fell w-o-w following placement of the Union Budget for 2024-25. In the Delhi-NCR region, ADC12 spot prices were assessed at INR 210,000/t ex-Delhi, aligning with domestic tense scrap prices, which settled at INR 176,000/t ex-Delhi.

Likewise, ADC12 prices in Chennai were reported at INR 212,000/t on immediate payment basis, excluding GST. At the same time, casting scrap prices were at INR 178,000/t ex-Chennai.

Additionally, the Indian market saw decreased activity after the interim Budget for the 2025 financial year (FY'25) was presented in Lok Sabha. Nonetheless, the import duty on aluminum scrap imports will remain at 2.5% for FY'25.

Copper

In Domestic segment, copper armature scrap prices rebounded d-o-d by up to 1.3% to INR 743,000/t exy-Delhi. Meanwhile, copper prices on the London Metal Exchange (LME) have increased by 0.15% d-o-d to $9,134/t. Secondary copper rod prices were assessed at INR 790,000/t.

In Imported segment, copper motors mix from the US were at $1,200/t. Europe origin brass honey 5-6% offers heard at 57.5-58% LME price, and US copper motors mix trade was heard at $1,200/t CFR Mundra.

India's 2024-2025 Budget eliminates the 2.5% Basic Customs Duty on copper ores and concentrates to boost copper demand. In FY'24, India imported 1.02 million tonnes (mnt) of copper concentrates, with ores and concentrates making up 46% of this total.

Zinc, lead

India's domestic zinc and lead prices fell w-o-w. Zinc prices dropped by 6% to INR 261,500/t, on low demand as per market sentiments, and a 4% drop in LME prices w-o-w. Lead prices dropped by 1%. In imported segment, zinc clean scrap from the UK was heard traded at $1965/t CFR West coast. Domestic remelted lead is priced at INR 188,000/t, ex-Delhi, and Middle East zinc diecast prices are at $2,160/t CFR Mundra.

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China market

In the week ending on 26 July, deliverable stocks of base metals in Shanghai Futures Exchange (SHFE)-registered warehouses experienced declines, however copper witnessed fall of over 5% w-o-w reaching 301,203 t, as per the exchange's weekly stocks report.

The highest outflow was seen in zinc at 113,978 t, the lead stocks was seen marginally increasing from Jiangsu warehouse this week, reaching 40,770 t.