Weekly round-up: Domestic base metals prices move south mirroring global trends
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At close of trading on Friday, 18 October 2024, base metals prices on the London Metal Exchange (LME) showed negative trends. Nickel recorded the sharpest drop, decreasing by 5.41%. Meanwhile, LME warehouse stocks exhibited negative trends, except nickel which rose 1.36%.
On the LME, three-month aluminium futures decreased by 0.78% to $2,612/tonne (t), and nickel prices fell by 5.41%, settling at $16,897/t. Copper prices were at $9,625/t, down 1.70%, while zinc decreased by 2.06% to $3,089/t. Lead fell by 1.19% to $2,072/t.
This week, the domestic and global base metal markets witnessed similar trends. The overall market demand and transactional activities remained low to moderate.
Aluminium
Imported scrap: Imported aluminium scrap offers into India decreased by up to 2.6% w-o-w. Offers decreased because aluminium prices on the London Metal Exchange (LME) edged back after witnessing a four-month high recently.
BigMint's benchmark assessments showed that tense scrap from the UAE was priced at $1,760/t, down 1.1% w-o-w, while zorba 95/5 prices from the UK stood at $2,080/t, both CFR west coast, India.
Aluminuim ADC12: Domestic spot prices of aluminium ADC12 alloyed ingots inched down w-o-w in both the northern and southern regions of the country, pressured by weak demand and declining domestic raw material costs.
In September, automobile retail sales in India fell by 9% y-o-y, with total registrations declining to 1,723,330 units from 1,899,192 units in September 2023, according to the Federation of Automobile Dealers Associations (FADA). Factors contributing to sluggish demand include seasonal influences like heavy rainfall and festivities, leading to historically high inventory levels having an impact on the aluminium alloy market.
BigMint's benchmark assessments for ADC12 (non-OEM grade) stood at INR 203,000/t in Delhi and INR 205,000/t in Chennai, down INR 3,000/t w-o-w.
Copper: Domestic copper armature prices were assessed at INR 764,000/t ex-Delhi, a slight increase of 2% w-o-w, while imported scrap prices decreased by up to 1.7% w-o-w. The drop in prices comes in the wake of copper futures on the London Metal Exchange (LME) slowing down after hitting a three-month high recently.
BigMint's assessment of US-origin copper motor mix were at $1,150/t, a fall by $20/t w-o-w.
Zinc, lead
India's domestic zinc and lead prices remained range-bound w-o-w amid fluctuations in LME futures by up to $30/t. Zinc rose 2% or INR 6,000/t ($71/t) w-o-w, while lead dropped 2%. HZL's prices fell slightly by 1% for both zinc and lead at INR 292,000/t ($3,473/t) and INR 179,000/t ($2,129/t), respectively. A deal was heard for lead scrap 1% from Australia at 95.5% of LME prices CIF Chennai.
China base metals market overview
In the week ending 18 October, deliverable base metals stocks in the warehouses registered with the Shanghai Futures Exchange (SHFE) displayed positive trends except zinc which saw a drop of 0.8%, with lead showing the largest inflow of 26.2% w-o-w, reaching 56,235/t, according to the exchange's weekly stocks report.
China's aluminium exports decline, copper imports surge
China's unwrought aluminium exports fell 5.4% m-o-m in September 2024 to 560,000 t, despite a 15% increase year-to-date. In contrast, unwrought copper imports rose by 15% m-o-m to 480,000 t, driven by seasonal demand, with total imports reaching 4.09 mnt in the first nine months of 2024, a 2.5% increase over the previous year.
Global updates
Vedanta to invest INR 1 lakh crore in Odisha
Vedanta, one of the world's leading producers of aluminium, will invest INR 1 lakh crore in Odisha to establish a 6 MTPA alumina refinery and a 3 MTPA green aluminium plant. The company noted that "demand for aluminium, a metal of the future" is likely to double by 2030, as per latest reports.
Indonesia's nickel industry transition
Luhut Binsar Panjaitan, a pivotal force in Indonesia's nickel sector, is stepping down as the country prepares for a new President. Given that his ban on nickel ore exports substantially boosted domestic investment, Panjaitan's departure has raised concerns about continuity in policies aimed at promoting "downstreaming" turning raw materials into finished products. Industry sources believe that the incoming administration needs to find a suitable successor to maintain momentum in this crucial industry.
Peru's copper output rebounds 11% in August
Peru's copper production surged 10.7% y-o-y in August to 246,568 t. This rebound follows five months of decline, driven primarily by Glencore's Antamina mine, which saw a 26.5% y-o-y increase in the production of the red metal. Despite this improvement, year-to-date production remains 0.7% lower than in 2023, indicating ongoing challenges in the industry.
