Weekly round-up: Global, domestic base metals markets witness downtrend amid US macroeconomic data analysis

Global base metals prices faced a predominantly downward trend for the week ending 12 January, influenced by negative US macroeconomic data. Weaker-than-expected December retail sales, a contraction in the ISM Non-Manufacturing PMI, and a strengthened US Dollar contributed to the pressure on prices. The mixed economic picture, along with ongoing global economic concerns, and geopolitical tensions came to the fore.

In LME, Three-month aluminium futures inched down by 2.4% to $2,219/tonne (t), while nickel settled at $16,343/t (down 0.2%). Copper prices were at $8,339/t and zinc dipped by 1.9% to 2,514/t. Conversely, lead prices gained marginally by 0.7% to $2,091/t.

LME-registered warehouse stocks displayed varied trends, notably with nickel witnessing the most significant influx, increasing by approximately 7% w-o-w.

Indian non-ferrous metals segment followed the global cues for the week. As per SteelMint's assessment, imported aluminium scrap prices witnessed a downtrend for the week, domestic scrap prices remained largely stable and primary aluminium market remained range-bound for the week. The copper prices slipped marginally, zinc and lead prices witnessed declines.

Trade activities in the market had slightly improved post-New Year holidays. However, the increase in sea freight charges after the Red Sea incident led to lower booking interest from the buyers' end.

Aluminium

During the week, primary aluminium ingot (P1020) prices dropped in the spot market, followed by price cuts by major primary players by up to INR 1,500/t.

SteelMint's aluminium ADC12 alloy ingot automobile equivalent spot prices in India rose by INR 500/t to INR 190,000/t, due to steady tense prices at INR 159,000/t ex Delhi. The domestic market faced tight scrap availability, while the future exchange market is expected to be range-bound. Silicon 553 of Chinese-origin decreased to $2,150/t, down $5/t.

In India, As per SteelMint's assessment original equipment manufacturers (OEMs) approved ADC12 experienced a m-o-m rise by INR 6,000/t to reach INR 198,000/t exw Delhi NCR, excluding GST.

India's automobile sales surged by 11% in 2023, with passenger vehicle sales rising by 11% and overall domestic sales increasing by 21% in December 2023.

Imported aluminium scrap prices declined due to decreased LME futures. Aluminium wheel scrap prices varied, with some offering $70-80/t discounts and Middle East sellers achieving $2,190-2,200/t, CIF WC India. Elections and budget developments may impact the market, supporting prices.

India's domestic aluminium scrap prices maintained stability with limited inquiries and demand. Tense scrap stood at INR 159,000/t ex-Delhi, and a slight shortage in the northern market is expected to support prices in the near term.

Copper

SteelMint's assessment for domestic copper armature prices in India held steady at INR 680,000/t ex-Delhi, while imported Brass Honey scrap contracted by USD 100/t w-o-w. Secondary CCR rods maintained range-bound levels at INR 720,000/t, and primary CC rods declined by 1.2% amid a 0.2% drop in LME prices. US-origin talk scrap was traded at 52.5-53.5% of three-month LME futures.

The MCX saw a 1% weekly decline in copper prices, settling at INR 719,000/t. Global copper prices on COMEX fell 1.6% to $8,316/t.

Chile, a top copper producer, experienced an 8% y-o-y drop in copper exports and a 12% y-o-y decline in production in December 2023. The market faced challenges such as increased sea freight charges and upcoming elections impacting prices.

Zinc and lead

India witnessed a 2.7% w-o-w decline in zinc prices to INR 230,000/t, exw-Delhi, in line with a 3.5% reduction by HZL. Simultaneously, SteelMint's assessment for remelted lead ingots saw a marginal 0.1% dip to INR 177,000/t, exw-Delhi. Additionally, Middle East zinc diecast imports fell 5%, amounting to a $35/t decrease to $1,925/t, CIF Mundra, reflecting a 2% decline in LME future prices.

Recent deals

• Around 120t Australia-origin tense (2%) was traded for $1,810/t, CIF Chennai.
  
  
• Around 25t of extrusion was heard at INR 175,000/t, Exw-Delhi.
  
  
• A recent deal for 50t of Australia-origin lead mix was heard for 3M (95%), CIF Chennai.
  
  
• 120t of copper cables originating from Australia was heard at 3M (90.5%), CIF Chennai.
  
  
• 50t of UAE-origin birch cliff was traded at 3M (91%), CIF Mundra.
  
  

Global updates

• India's annual retail inflation rose to 5.69% in December from 5.55% the previous month, growing at the fastest pace.
  
  
• Maruti Suzuki India (MSI) is set to invest INR 35,000 crore in establishing its second manufacturing facility in Gujarat.
  
  
• China's copper imports dropped by 6.3% in 2023 to 5.5 mnt due to increased domestic production and a stronger US dollar, which raised import costs.
  
  
• China has surpassed Japan as the world's leading auto exporter in 2023, with a record 62% increase, totalling 3.83 million vehicles.