Weekly round-up: Global, domestic base metals markets see positive trends on US Fed rate cuts

At the close of trading on Friday, 20 September 2024, base metals prices on the London Metal Exchange (LME) showed positive trends, except for zinc. Nickel recorded the largest gain in terms of prices, increasing by 3.55%. Meanwhile, LME warehouse stocks exhibited mixed trends, with lead rising by 16.69%.

Prices of most base metals rose following the US Federal Reserve's half-percentage point interest rate cut, which signalled a commitment to keeping unemployment low amid easing inflation. This decision boosted shares of Chinese real estate developers, fuelling speculation about potential cuts to China's loan prime rate and mortgage rates to support the struggling housing market and stimulate economic recovery.

On the LME, three-month aluminium futures increased by 0.57% to $2,485/tonne (t), and nickel prices were up by 3.55%, settling at $16,510/t. Copper prices were at $9,476/t, up by 1.80%, while zinc decreased by 1.03% to $2,874/t. Lead climbed by 0.59% to $2,055/t.

Aluminium

Imported scrap prices rise: Imported aluminium scrap prices in India drifted higher w-o-w amid a rise in LME aluminium prices. Meanwhile, transactional activities remained on the lower side for a few grades due to significant bid-offer disparities seen in the market.

According to BigMint's benchmark assessments, tense from the UAE was priced at $1,810/t, up 1.1% w-o-w, while zorba 95/5 from the UK was assessed at $2,070/t, both CFR west coast, India.

Domestic scrap edges up: In the domestic market, tense scrap prices marginally inched up w-o-w in both Delhi and Chennai. According to BigMint's assessment, domestic tense scrap prices are now at INR 175,000/t ex-Delhi-NCR and INR 176,000/t ex-Chennai.

Aluminium ADC12 (non-OEM) remains range-bound: India's spot prices of aluminium ADC12 alloyed ingots remained range-bound w-o-w in both the northern and southern regions, influenced by reduced demand and stable domestic raw material costs. As per BigMint's benchmark assessments, the ADC12 (non-OEM) grade stood at INR 207,000/t in Delhi and INR 209,000/t in Chennai, showing minimal change w-o-w.

Additionally, a leading automobile manufacturer has set ADC12 prices for October 2024 settlements at INR 215,900/t, a decrease of INR 2,600/t from the prior month. This drop was driven by weak demand and elevated inventory levels in the automobile sector, which limited aggressive purchasing and exerted downward pressure on prices.

Copper

Imported scrap prices trend upward: According to BigMint's assessment, talk scrap from the US was at $4,950/t, a 2.1% w-o-w rise. Prices of Middle East-origin scrap, largely from the UAE, were recorded at $4,720/t, up by 1.5% w-o-w.

Copper motor mix scrap is being offered at $1,200/t by sellers based in the EU and the US. However, these prices seem to be higher than the bids currently being placed, though BigMint also noted trades concluding at $1,170-1,180/t CFR Mundra and $1,180/t CFR Qasim.

Domestic prices nudge lower: Domestic copper armature scrap prices dropped to INR 744,000/t exy-Delhi. Meanwhile, secondary copper rod prices were at INR 794,000/t.

Zinc, lead

Domestic prices see mixed trends: India's domestic zinc prices rose by INR 11,000/t ($132/t). Lead remained stable w-o-w as compared to 13 September 2024. Zinc prices were up by 4.2% to INR 276,000/t, in line with a 6% rise in HZL prices, while LME prices remained stable. Domestic remelted lead was priced at INR 183,000/t ex-Delhi, remaining steady as compared to the previous week.

Imported prices rise: Middle East zinc diecast prices stood at $3,312/t CFR Mundra, up by 0.4%.

China base metals market overview

In the week ending 20 September 2024, deliverable base metals stocks in the warehouses registered with the Shanghai Futures Exchange (SHFE) displayed mixed trends, with lead showing the largest inflow of 18.5% w-o-w, reaching 61,004/t, according to the exchange's weekly stocks report.

Global updates

India's zinc consumption to surpass over 2 mnt: IZA

India's zinc consumption is projected to surpass over 2 million tonnes (mnt) in the next decade, up from 1.1 mnt, according to the International Zinc Association (IZA). Zinc demand is expected to grow by 43% in solar applications and wind energy by 2030. The global average per capita use of zinc is 90-95%.

Global aluminium production holds steady in Aug'24: IAI

According to the latest data from the International Aluminium Institute (IAI), aluminium production in August 2024 remained largely stable, edging down to 6.17 mnt as compared to 6.19 mnt in July 2024. In contrast, production increased by 2% y-o-y from 6.08 mnt in August 2023. Notably, China, as the primary aluminium producer, maintained its output at 3.69 mnt in August 2024.