Weekly round-up: Domestic base metals prices in line with global market; copper stocks fall nearly 5% w-o-w

Base metals prices on the London Metal Exchange (LME) remained positive for the week closing on 15 March 2024. Notably, copper prices gained 5.75% w-o-w. Meanwhile, stocks at LME registered warehouses witnessed outflows barring nickel.

Copper inventories experienced a fall of nearly 5%, reaching 107,300 t from 112,800 t.

On the LME, three-month aluminium futures increased by 1.52% at $2,274/t, while nickel settled at $18,074/t (up 0.35%). Copper prices were at $9,072/t (up 5.75%), zinc gained 1.35% to $2,561/t and lead prices rose by 1.19% to $2,129/t.

During this week, the domestic and global base metals markets were in synchrony. Both imported and domestic aluminum scrap markets maintained positive price levels.

Aluminium

During the week, primary aluminium ingot (P1020) prices in the spot market rose amid price hikes by primary players.

Aluminium ADC12 alloy ingot (automobile equivalent) spot prices increased by INR 2,000/t to INR 207,000/t w-o-w exw Delhi, excluding GST. This increase was observed amid an increase in local tense scrap prices in both north and south India where shortages continue to be a significant concern, according to BigMint assessment.

In the domestic space, scarcity of raw materials, particularly tense scrap, has kept prices on the higher side. Tense scrap prices are at INR 178,000/t exy-Delhi (excluding GST).

Imported aluminum scrap prices in the Indian market are rising, driven by a number of factors. This includes the upward surge in aluminium LME levels, a scarcity of material both domestically and globally, and escalating freight rates.

According to assessments by BigMint, aluminum imported scrap prices have increased by up to 2.6%. Tense scrap from the UAE rose by $35/t to reach $1,825/t, while zorba 95/5 UK origin, increased by $10/t to $2,040/t CFR Mundra. UAE extrusion 6063 scrap also saw a $25/t rise to $2,170/t CFR western coast India, while talk scrap from the UAE rose by $80/t to $4,490/t.

Copper

Domestic copper prices increased w-o-w, with armature scrap at INR 715,000/t and secondary rods at INR 758,000/t ex-Delhi. Meanwhile, copper cathode prices on the MCX rose by 2% w-o-w to INR 762,000/t as against the previous week for the March contract aligning with the domestic market.

BigMint's assessment of brass honey scrap (4%) from the Middle East rose by 1.6% w-o-w to $5,580/t. Similarly, US motor mix gained 6.4% to $1,240/t CFR Mundra.

Zinc, lead

India's zinc market showed an upward price trend, with zinc ingot prices reaching INR 230,000/t ex-Delhi, up by 3.3% w-o-w due to a INR 8,900/t hike in HZL prices. Re-melted lead prices remained at INR 178,000/t ex-Delhi. In the imported segment, Middle East zinc diecast (5%) rose by 0.8% w-o-w following LME zinc price increases.

Global updates

Malaysia's industrial production exceeded expectations in January, showing a 4.3% y-o-y increase, according to government data released on Tuesday last. This growth rate marks the fastest expansion since May of the previous year, when factory output rose by 4.7%.

Indian industrial output grew by 3.8% y-o-y in January, while manufacturing output rose by 3.2%, down from 4.5% y-o-y. Electricity generation increased by 5.6%, while mining activity grew by 5.9%. Consumer durables saw robust growth at 11%, but non-durables slipped slightly by 0.3%.