Back

India Base Metals: Mixed; most down on LME tracking Asian markets

Tuesday, Aug 13

 

By Rituparna Ghosh

 

NEW DELHI – Futures contracts of base metals on Multi Commodity Exchange of India were mixed today, while the parent contracts on London Metal Exchange were mostly in red tracking Asian stocks, which tumbled following increasingly violent protests in Hong Kong, analysts said.

 

Lead prices on MCX were down 0.7% at 153.65 rupees per kg tracking its parent LME contract as investors rushed to book profits after lead prices touched a two-week high on the London bourse on Monday. Lead prices rose sharply on Monday after China-based Nyrstar, the global mining and smelting company said that it had stopped its lead production at its Port Pirie smelter in Australia, raising fears of supply shortage of the metal.

 

China is the world's largest producer of lead, which is one of the key elements used in car batteries.

 

Aluminium prices on both MCX and LME were down today as against a sharp rise in the Shanghai Metal Exchange, which rose to its highest in more than two months today, as a typhoon in China affected the world’s top aluminium producer, easing concern over an oversupply of the metal.

 

Facilities belonging to China's Hongqiao Group were damaged by flooding after Typhoon Lekima wreaked havoc in the smelting heartland of Shandong.

 

However, a sharp fall in the rupee against the dollar limited any further loss in the metals. The domestic currency today closed at 71.40 rupee a dollar as against 70.80 rupees on Friday. Indian financial markets were closed on Monday on account of Id-ul-Zuha. 

 

Given that India is a net importer of industrial metals, a weakness in the domestic currency makes the dollar-denominated base metals cheaper.

 

Moreover, nickel prices remained higher amid uncertainties that Indonesia may ban nickel exports this year. Nickel prices also got a boost following media reports that quoted Indonesian minister in charge saying that President Joko Widodo will make the final decision on whether the country brings forward an export ban on the mineral ore.

 

Comments from coordinating minister for maritime affairs Luhut Pandjaitan that the country aims to speed up enforcement of a ban on mineral ore exports also boosted investors' expectations.

 

Indonesia is the world's largest nickel ore supplier and a fall in exports from the country would be bullish for prices.

 

"Outlook for rest of base metals barring nickel are negative. Nickel continues to outperform other base metals largely due to the Indonesia ban on exports. However, the rally is unlikely to sustain and there should be a correction of 5-6% by the end of this month," said Navin Nair, senior research analyst at Emkay Commotrade. 

 

At 1900 IST, on MCX, futures contracts of:

–Aug aluminium was at 140.2 rupees a kg, down 0.2%

–Aug copper was at 445.75 rupees a kg, up 0.3%

–Aug lead was at 153.35 rupees a kg, down 0.7%

–Aug nickel was at 1,127.8 rupees a kg, up 0.5%

–Aug zinc was at 185.2 rupees a kg, up 0.1%

 

OUTLOOK 

On MCX, the August copper of contract is seen trading at 440-450 rupees per kg, while the August nickel contract is seen at 1,125-1,135 rupees, and the front-month zinc contract is seen at 183-188 rupees a kg in the evening session, analysts said.  End

 

End

 

Edited by Mainak Moitra

 

Cogencis Tel +91 (22) 6619-0000

Send comments to feedback@cogencis.com

This copy was first published on the Cogencis WorkStation

© Cogencis Information Services Ltd. 2019. All rights reserved.

Other News

Banking source says MPC to remain accommodative till growth revives

Friday, Nov 15 By T. Bijoy Idicheriah MUMBAI – The sharp rise in retail inflation in October notwithstanding, the Reserve Bank of India's Monetary Policy Committee is likely to maintain an accommodative policy stance and provide further easing till economic growth revives, a banking industry source told Cogencis. "Till growth revives, that is the MPC commitment," the source said. India's […]

Source says NMDC cut iron ore product prices by 100 rupees/tn for Nov

Friday, Nov 15 By Narayana Krishna –Source:NMDC cuts iron ore fines price by 100 rupees/tn to 2,360 rupee–NMDC cuts iron ore lump price by 100 rupees/tn to 2,600 rupee HYDERABAD – Public sector iron ore major NMDC Ltd has cut the prices of its iron ore products by 100 rupees per tn, a source told Cogencis.Post the cut, […]

Hindalco cuts prices of aluminium products after six hikes in a row

Friday, Nov 15 By Nikita Periwal MUMBAI – Hindalco Industries Ltd has cut the prices of its aluminium ingots, wire rods and billets after hiking them six times in a row, trade sources told Cogencis. The company has cut the prices of its products by nearly 1% with effect from Tuesday, and the products now cost between 147,000-157,600 […]