Weekly round-up: Domestic base metals prices follow global cues; Lead stocks hit record high

Base metals prices experienced a decline on the London Metal Exchange (LME) on Friday, 9 February, marking yet another week of losses as the Lunar New Year holidays (8-17 February) commenced. Zinc saw the most significant decrease, dropping by over 6%, followed by lead which fell by over 5%, which could be attributed to a rise in stocks at LME registered warehouses.

Lead stocks saw a notable increase of over 19% to reach 150,675 t, with zinc following closely behind with a rise of over 14% to 227,225 t. Additionally lead stocks hit two year high, as per the data maintained with BigMint.

Furthermore, copper's three-month contract prices hit a three-month low at $8,170/t levels amid a stronger dollar and concerns over China's economy.

In LME, three-month aluminium futures decreased by 0.7% to $2,216/tonne (t), while nickel settled at $15,921/t (down 1.9%). Copper prices were at $8,169/t (down 3.6%), zinc dipped by 6.1% to $2,300/t and lead prices dropped by 5.2% to $2,032/t.

In the Indian non-ferrous metals sector, prices mostly mirrored the global trend, staying predominantly lower. Imported aluminum prices dipped, while domestic scrap prices increased due to limited availability in the northern market. Both copper and zinc markets experienced price declines, while lead prices remained relatively stable with minor fluctuations.

Market trade activities for imported material remained moderate for the week, though concerns persisted about the increasing freight rates.

Aluminium

During the week, primary aluminium ingot (P1020) prices dipped in the spot market, followed by price cuts by major primary players.

Aluminium ADC12 alloy ingot prices surged m-o-m by INR 6,000/t to INR 204,000/t exw Delhi. Spot prices rose w-o-w to INR 198,500/t. Raw material scarcity, especially tense scrap, elevated costs. Freight charges, supply chain disruptions fuelled price hikes.

In the domestic space, scarcity of raw materials, particularly tense scrap, has kept prices on the higher side. Tense scrap prices were at INR 169,000/t, up by over 2% w-o-w, exy-Delhi (excluding GST).

Imported aluminium scrap prices in the Indian market dropped, influenced by futures decline despite limited availability. Tense scrap from the UAE decreased by $20/t to $1,700/t, while US tense scrap dropped $15/t to $1,760/t w-o-w. Aluminium futures prices also fell, impacting scrap rates.

Copper

Domestic copper armature prices in Delhi fell by 1% w-o-w to INR 670,000/t, while secondary CCR rods dropped 1.1% to INR 710,000/t and primary CC rods declined 2% to INR 730,000/t.

Coming to the future exchange market in India which is mostly influenced by MCX, where copper cathode prices experienced a 0.4% weekly decline and recorded at INR 703,000/t against INR 706,000/t for the February 2024 contract.

Despite a surge in freight post-Red Sea incident, market instability persisted as abundant supply in the imported segment led to a 2.6% w-o-w decline in scrap prices. The 3.6% weekly drop in LME future prices and a 3.7% decrease in COMEX prices also mirrored the downturn in imported prices for the week.

Zinc, lead

Zinc ingot prices domestically witnessed a 5.5% w-o-w decline, attributed to a 5% drop in HZL's prices and subdued demand. BigMint assessed zinc ingot prices at INR 220,000/t, while re-melted lead ingots saw a marginal 0.8% increase to INR 180,000/t exw-Delhi.

Coming to the imported market, zinc diecast (5%) from the Middle East decreased by 1.8% to $1,915/t CFR Mundra, in tandem with a 5% drop in LME futures and a 9% rise in LME warehouse inventories.

Global updates

China's consumer prices experienced their sharpest decline in over 14 years in January, with the CPI falling 0.8% y-o-y.

India's key rate remained unchanged at 6.50% for a sixth consecutive meeting as inflation persisted above the 4% target.

Japan's base metals production for FY23 recorded declines, with electrolytic copper decreasing by 3.4% y-o-y and zinc witnessing a drop of 6.5%.