Weekly round-up: Domestic base metals prices show divergent trends
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At close of trading on Friday, 25 October 2024, base metals prices on the London Metal Exchange (LME) showed varied trends. Nickel recorded the sharpest drop, decreasing by 4.32%. Meanwhile, LME warehouse stocks exhibited mixed trends, with copper decreasing by 6.98%.
On the LME, three-month aluminium futures increased by 2.49% to $2,677/tonne (t), and nickel prices fell by 4.32%, settling at $16,167/t. Copper prices were at $9,602/t, down 1.93%, while zinc increased by 0.42% to $3,102/t. Lead fell by 1.25% to $2,046/t.
Aluminium
- Imported aluminium scrap offers in India rose by up to 3.5% w-o-w. Although buying interest was weak, offers increased due to the rise in LME aluminium prices.
- The price increase in aluminium was fuelled by a significant rise in alumina prices, which is used to produce primary aluminium. Alumina supply has tightened due to a bauxite shortage caused by disruptions in Australia and Guinea.
- BigMint's benchmark assessment for tense scrap originating from the UAE was at $1,790/t, up by 1.7% w-o-w, and for zorba 95/5 from the UK at $2,090/t, both CFR west coast, India.
- According to latest data from the International Aluminium Institute (IAI), September aluminium production reached 6.007 mnt, a 3% decrease from 6.205 mnt in August. In contrast, production rose by 2% y-o-y from 5.930 mnt in September'23. Notably, China's output fell to 3.59 mnt, down 3% m-o-m.
- Domestic spot prices of aluminium ADC12 alloyed ingots inched down by INR 1,000/t w-o-w in both the northern and southern regions of the country pressured by weak demand and stable domestic raw material costs.
- BigMint's benchmark assessments for ADC12 (non-OEM) grade stood at INR 202,000/t in Delhi and INR 204,000/t in Chennai, down INR 1,000/t w-o-w.
Copper
- Domestic copper armature prices were assessed at INR 742,000/t ex-Delhi, a drop of 3% w-o-w, while imported scrap prices increased by up to 5.7% w-o-w.
- BigMint's assessment of US-origin copper motor mix were at $1,215/t, up by $65/t w-o-w.
- The International Copper Study Group (ICSG) recently unveiled preliminary figures showing that global refined copper production increased by 5% in the first eight months of 2024 (January-August 2024), and secondary production (from scrap) rose by 4.6%.
- The increase in refined copper production was primarily fuelled by robust performances in China and the Democratic Republic of Congo (DRC), resulting from expanded capacities.
Zinc, lead
- Domestic zinc and lead ingot prices gained up to INR 8,000/t ($95/t) w-o-w, reflecting a sharp jump in LME zinc over the three-month contract, with a 3% rise in futures. Hindustan Zinc Limited's (HZL) zinc prices increased by 3% while lead prices remained steady. Zinc prices stood at INR 300,000/t ($3,568/t) amid supply disruptions globally, as per latest reports.
Global updates
- Adani's Kutch Copper in talks with BHP for INR 30,000 cr deal: Gautam Adani-controlled Kutch Copper is negotiating with BHP to source up to 1.6 million tonnes (mnt) of copper concentrate annually. The deal, valued at INR 30,000 crore, aims to support Kutch Copper's Mundra Refinery project, positioning it as the world's largest single-location smelter with a 1 million tonne per annum (mtpa) capacity upon completion.
- IMF lowers Japan's 2024 growth forecast: The International Monetary Fund (IMF) has reduced Japan's 2024 growth forecast to 0.3%, down from 1.7% in 2023, citing supply chain issues and declining tourism. However, it expects a recovery to 1.1% growth in 2025, driven by rising real wages and strong consumer spending. The IMF also expects the Bank of Japan to gradually raise interest rates.
- Taseko provides update on Florence copper project: Taseko Mines announced that its Florence copper project in Arizona is nearly 40% complete, with an aim to initiate production by Q4 of 2025. Since construction began, 300,000 work hours have been logged without injuries.
