Weekly round-up: Indian and global base metal markets witness diverging trends; Aluminium and nickel inventories hit record highs

Base metal prices concluded the year on a positive note as they all experienced a w-o-w increase on the London Metal Exchange (LME) during the final trading day of 2023. On the other hand, the domestic Indian market displayed mix trends, with limited trading activities throughout the week primarily due to the year-end slowdown.

Three-month aluminium futures on the LME inched up by 2.5% to $2,384/tonne (t), while nickel settled at $16,603/t (up 0.6%). Zinc prices were at $2,658/t and lead gained by 0.2% to 2,068/t. Conversely, copper prices were almost firm at $8,560/t. The stocks at LME-registered warehouses witnessed inflow w-o-w by up to 14.3% barring zinc.

Aluminium and nickel inventories in LME warehouses notably reached new weekly highs, with aluminium rising by 7.9% and nickel by 14.3% w-o-w. The surge highlights surplus supply, and traders speculate on increased Russian metal inflows, fueling concerns amid ongoing geopolitical tensions, as per secondary sources.

The Indian non-ferrous metals market exhibited diverse patterns, with muted offers for imported aluminium from the western region. Conversely, offers from the Middle East were slightly elevated, and domestic scrap prices remained higher. Copper prices slightly rose, zinc recorded modest increases, and lead prices saw marginal declines.

Aluminium

During the week, primary aluminium ingot (P1020) prices rose by over 4% in the spot market, followed by price hikes by major primary players.

A prominent Indian automaker, wielding significant influence over domestic aluminum alloy ingot pricing, announced a monthly settlement price for ADC12 for January 2024 last week. The m-o-m uptick of INR 2,000/t influenced a 0.5% w-o-w increase in domestic ADC12 prices, reaching INR 184,000/t, exw-Delhi.

The Indian imported aluminium scrap market has observed a surge in prices from the Middle East, coupled with limited transactions. Meanwhile, transactions in the western region, including the USA and the UK, have temporarily halted due to the absence of firm offers during the Christmas holidays.

India's domestic aluminium scrap market activities remained volatile while prices moved up w-o-w. The market faced shortage of tense scrap in some parts of the northern region.

Copper

Copper prices in the domestic market increased by 3% w-o-w. In Delhi, secondary rod and copper armature scrap were priced at INR 725,000/t and INR 682,000/t ex-works, respectively. Buyers are cautiously stockpiling materials before the new year, while sellers raised offers for their stocked items. Amid holidays in the US uncertainty looms on imported copper scrap to CIF Mundra.

Meanwhile, brass honey scrap (4%) originating from the Middle East witnessed a drop of 0.5% w-o-w to $5,485/t, CIF Mundra.

MCX copper prices recorded a marginal w-o-w decrease, dropping from INR 732,000/t to INR 730,000/t. Likewise, COMEX copper prices saw a 0.2% decline to $8,557/t compared to the previous week. However, this had no influence on the domestic market.

Copper output in Chile, the world's largest producer of the red metal, decreased 3% m-o-m in November to 444,905 t, according to the country's INE statistics agency.

Zinc and lead

HZL raised zinc prices by 2%. Domestic zinc prices climbed by 2.1% to INR 236,000/t, while remelted lead ingot saw a 0.3% decrease to INR 178,000/t, both ex-Delhi. On the imported segment zinc diecast (5%) from the Middle East fell by 1% to $1,940/t, CIF Mundra.

Recent deals

• Around 20 t of aluminium wire scrap was heard at INR 206,000/t, Exw Delhi.
  
  
• A recent deal for 10 t of copper CCR (99.91%) was heard at INR 725,000/t, Exw Delhi.
  
  

Global updates

• Japanese aluminium premium records fourth consecutive quarterly drop for Q1'24 shipment declining by 7% q-o-q to $90/t.
  
  
• In Nov'23, global alumina production, according to data IAI, reached 11.85 mnt, marking a 4.3% annual rise from 11.36 mnt and a slight 1.9% decline from Oct'23.
  
  
• China's November industrial profits surged by 29.5%, marking a fourth consecutive monthly gain, driven by improved manufacturing.
  
  
• Japan's November factory output dropped by 0.9%, less than the predicted 1.6%, with declines in auto and electronic equipment production.
  
  
• President Joe Biden extended the suspension of tariffs on EU steel and aluminium for two years, aiming to facilitate negotiations addressing overcapacity and promoting low-carbon production.