Weekly round-up: Global, domestic base metal markets align; aluminium stocks rise over 8%
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Base metals prices on the London Metal Exchange (LME) remained on the positive side barring aluminium for the week closing on 23 February 2024. Notably, aluminium prices dropped by 1.7% w-o-w amid surging stocks. Meanwhile, stocks at LME registered warehouses witnessed mixed trends.
On the other hand, aluminium stocks saw a notable increase of over 8% to reach 580,275 t from 534,925 t.
On the LME, three-month aluminium futures decreased by 1.7% to $2,180/t, while nickel settled at $17,495/t (up 6.9%). Copper prices were at $8,567/t (up 0.9%), zinc gained by 0.8% to $2,405/t and lead prices rose by 1.5% to $2,095/t.
In India, imported and domestic aluminium scrap prices saw minor fluctuations, while on the primary market P1020 prices declined. Copper and zinc prices remained positive while lead prices remained largely stable.
Aluminium
During the week, primary aluminium ingot (P1020) prices in the spot market dropped amid price cuts by primary players.
Spot prices for aluminum ADC12 alloy ingots in the automobile sector rose by INR 2,000/t w-o-w to INR 204,000/t, driven by higher local tense scrap prices. India's leading automobile manufacturer set March settlement prices for ADC12 at INR 207,400/t, marking a significant monthly increase of INR 7,900/t and the highest level in 10 months.
Indian imported aluminum scrap market experienced mixed trends due to sellers' reluctance in future bookings, citing high freight costs and the Red Sea conflict. Negotiations faced challenges with bid-offer gaps of $50-60/t, reaching $80-90/t in some cases, leading to limited trades.
In the domestic space, scarcity of raw materials, particularly tense scrap, kept prices on the higher side. Tense scrap prices are at INR 172,500/t exy-Delhi (excluding GST).
Copper
Domestic copper prices increased w-o-w, with armature scrap at INR 687,000/t and secondary rods at INR 728,000/t, ex-Delhi. Positive demand for finished material and the reopening of the China market boosted prices this week.
Copper cathode prices on the MCX rose by 1% w-o-w to INR 730,000/t as against INR 723,000/t for the February contract aligning with the domestic market.
In the imported segment, copper prices in India climbed 3.5% w-o-w. Middle Eastern brass honey surged $185/t to $5,485/t. Bid-offer disparities persisted due to a $300/t increase in three-month LME contract prices as of the scheduled assessment time, with some sellers offering tentative bids.
Copper prices on COMEX witnessed a weekly rise by 2% settling at $8,579/t from $8,425/t the previous week, aligning with imported copper market prices.
Zinc and lead
Zinc prices in Delhi rose by 1.2% due to a 2% raise by HZL, yet they linger near 6-month lows. Re-melted lead ingot prices remained stable at INR 177,000/t ex-Delhi.
In the imported market, zinc diecast (5%) originating from the Middle East rose by 1.3% to $1,930/t CFR Mundra, mirroring a 1.4% weekly increase in LME futures prices.
Global updates
According to the International Copper Study Group (ICSG), global copper mine production experienced a modest increase of approximately 1% reaching 22.063 mnt in CY'23 compared to 21.950 mnt in the same period of the previous year.
First Quantum Minerals secured $500 million from Jiangxi Copper for delivering 50,000 t of copper anodes annually from Zambia.
Rio Tinto disclosed an 11% decrease in full-year underlying earnings, ascribed to diminished contributions from its aluminum business due to lower prices.
