Weekly round-up: India's base metals market aligns with global trends; LME stocks drop by up to 5.1%

Base metals prices on the London Metal Exchange (LME) experienced a w-o-w increase ending on 26 January, 2024. Prices of base metals rose, with zinc leading the way with a gain of up to 5.2%. Concurrently, there were outflows in stocks, particularly notable in zinc, which saw a withdrawal of over 5% w-o-w.

In LME, three-month aluminium futures increased by 4.9% to $2,274/tonne (t), while nickel settled at $16,790/t (up by 4.7%). Copper prices were at $8,547/t, zinc surged by 5.2% to $2,590/t and lead prices gained by 1.8% to $2,144/t.

LME-registered warehouse stocks witnessed outflows, notably with zinc witnessing the most significant outflow, decreasing by 10,450 t to 191,600 t from 202,050 t in the previous week.

In the Indian non-ferrous metals sector, prices predominantly remained elevated during the week, aligning with the global trend. According to BigMint's evaluation, both imported and domestic aluminium market prices experienced minor fluctuations. However, copper, zinc, and lead prices saw increases during this period.

Market trade activities maintained a moderate pace for the week, though concerns persisted about the increasing freight rates.

Aluminium

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

Aluminium ADC12 spot prices remained steady at INR 190,000/t, ex-Delhi. Tense scrap prices for Delhi was at INR 161,000/t, excluding GST. Major OEMs reportedly faced lack of future bookings.

Aluminium Tense scrap demand in the domestic market remained robust, due to a slight shortage. Limited material availability and rising freight charges from western countries hindered purchases. Major OEMs' sufficient stock contributed to a slow pace in finish aluminium sales. China-origin silicon 553 was at $2,140/t, CIF Mundra.

The Indian imported aluminium scrap market faced challenges with declining futures, higher freight rates, and bid-offer disparities. BigMint reported stable Zorba 95-5, UK-origin, at $1,970/t. Copper's LME cash prices impact talk scrap prices, resulting in a $30/t increase.

Copper

India's domestic copper market prices rose over 1% amid a positive trend in finish market. Armature scrap prices stood at INR 675,000/t (up 1%) and secondary rods prices were at INR 719,000/t (1.1%), both ex-Delhi. Copper prices on MCX were in line with domestic market at INR 731,000/t, up by 1%.

In the imported segment, BigMint's assessment for mixed motor scrap from the US was up by 1.3% and stood at 1,160/t, with caution among buyers due to a bid-offer difference of $50-$60/t. Middle East-origin brass honey scrap rose by $100-$110/t w-o-w.

Meanwhile, global copper prices on COMEX gained by 1.9% to $8,469/t from $8,315 aligning with the positive market trends.

Zinc, lead

BigMint's assessment revealed a 1% uptick in SHG zinc ingots to INR 229,500/t, exw-Delhi, driven by Hindustan Zinc Limited's adjustments. HZL's 3.5% lead price hike contributed to a 1.1% rise in domestic remelted lead ingot prices to INR 179,000/t, exw-Delhi. The domestic market mirrored MCX with zinc rising 2% to INR 227,000/t and lead increasing 1% to INR 183,000/t.

In the imported zinc market, Middle East-sourced zinc diecast (5%) dropped 1.8% to $1,910/t, CFR Mundra. Despite sellers suggesting higher prices, with increases of $25-$40/t, buyers remained firm at $1,900-1,910/t.

Global updates

• India's copper semi-finish imports saw a 34% dip in December, 2023 to 35,432 t from November's 53,414 t.
  
  
• India's aluminium semi-finish imports fell 4% to 27,015 t in December, 2023. However, there was a remarkable surge of 33% y-o-y in CY'23.
  
  
• China's central bank cut bank reserves by 50 basis points, injecting $140 billion to support the economy.
  
  
• In January, Japan's manufacturing sector contracted for the eighth consecutive month, with the au Jibun Bank flash manufacturing PMI at 48.0, just above December's 47.9.