Weekly round-up: Non-ferrous metals prices show mixed trends

Global base metals markets witnessed a downtrend this week, with prices of all metals on the London Metal Exchange (LME) declining w-o-w. In contrast, Indian base metals prices fluctuated w-o-w. Three-month aluminum futures on the LME edged down by 1.8% to $2,127/t, while nickel decreased by 4.7% settling at $20,000/t. Copper prices dipped 2.5% to $8,242/t, while zinc dropped 2.7% to 2,415/t. Lead prices fell by 0.5% to $2,118/t.

Stock levels at LME warehouses also fell w-o-w with the exception of copper. Notably, copper stocks surged w-o-w to 84,900t (up 7%) from 79,325 t last week.

The Indian base metals market displayed mixed trends. Some grades of aluminum witnessed a decline in prices, while others showed a slight uptick. Zinc witnessed fluctuations, while the lead market saw modest improvements due to a slight rise in demand. However, copper prices decreased over the week.

Aluminium market

During the week, primary aluminium ingot (P1020) prices fell marginally. SteelMint's assessment for aluminium ingot P1020 stood at INR 215,000/t exy-Delhi, excluding GST.

The Indian ADC12 aluminium alloy ingot market remained stable due to firm scrap prices, steady futures contracts, and modest price cuts by the primary producers. Prices hovered at INR 188,000-190,000/t exw-Faridabad. Demand is moderate, while manufacturers are competing for market share in a balanced supply environment.

Local aluminium scrap prices remained range-bound w-o-w. The domestic market is facing tight supply of scrap, especially auto-casting grade scrap.

Global aluminium market

This week, the Indian imported aluminium scrap market witnessed prices dropping up to 5.8% w-o-w, as per SteelMint assessment. Decreased offers, lower futures and reduced buying interest resulted in limited transactions, especially in specific areas. The market faces limited demand due to sluggish activity in metal futures exchanges, contributing to the bearish outlook.

Meanwhile, US-origin aluminium talk prices plunged $225/t w-o-w to $4,440/t CIF west coast India today. The other scrap grades declined by $20-70/t w-o-w.

Copper market

In the domestic copper market, prices witnessed a slight decline w-o-w. Prevailing cautious sentiment in the market is affecting prices and the upcoming holiday next week is prompting traders to adopt a wait-and-watch strategy.

Today, copper prices on the Multi Commodity Exchange (MCX) dipped 2% reaching INR 725,000/t w-o-w in line with the domestic market.

In the imported market segment, prices of copper motor scrap originating from the US were recently assessed at $1,090-1,100/t CIF Mundra.

A recent deal was concluded for 25 t of large copper motor scrap from the US at $1,110/t CIF Mundra.

Zinc and lead markets

A slight fluctuation was observed in zinc and lead prices. Special high-grade zinc prices fell by 1.3% w-o-w to INR 226,000/t ex Delhi on limited buying enquiries. Similarly, lead prices increased by 1% on slight uptick in demand. Re-melted lead ingot prices stood at INR 181,000/t exy Delhi.

In the imported market, Middle East-origin zinc die cast prices were recently assessed at $2,040/t CIF Mundra. Additionally, a recent deal was concluded for 23 t of zinc die cast (10%) originating from Libya at $1,725/t CIF west coast India.

Macroeconomic developments

• India's National Aluminium Co (Nalco) has announced a quarterly drop in profits of over 40%, attributed to weakened prices and demand.
  
  
• India's June industrial output growth hit a three-month low at 3.7% y-o-y. Manufacturing slowed to 3.1% y-o-y.
  
  
• Russia's Rusal reported decline in revenue by 16.9% y-o-y in H1CY'23, attributed to a 24.2% decline in LME aluminium prices. Aluminium sales rose by 9.8%, but adjusted EBITDA fell by 84% compared to H1CY'22.
  
  
• China's imports and exports in July fell more than anticipated, Imports dropped 12.4% y-o-y, while exports contracted 14.5%.