India Base Metals: Up on weak US dlr, China’s industrial output data

Tuesday, Sep 15, 2020


By Rituparna Ghosh


NEW DELHI – Futures contracts of base metals on Multi Commodity Exchange of India and London Metal Exchange rose today due to broad-based weakness in the US dollar and as China's industrial output rose 5.6% on year in August, expanding for the fifth consecutive month, analysts said. 


* ZINC prices rose over 1% following reports that downstream onshore demand in China is firm and with a strong winter expected early, zinc restocking has been noted, UK based-brokerage house Marex Spectron said in a note.  


* NICKEL prices also rose on reports that Tesla is in talks with Giga Metals for the development of a large nickel mine in Canada. The Turnagain mine in British Columbia has indicated resources of 2.36 mln tn of nickel and 141,000 tn of cobalt. However, ANZ Research believes the price outlook could remain reliant on the stainless steel sector.


* The rise in COPPER prices was capped as copper output from Democratic Republic of Congo is likely to contract only 3.5% this year, much less than the 18% slump projected earlier, amid easing of disruptions from the COVID-19 pandemic, Fitch Solutions said. In 2019, the country had produced 1.3 mln tn of copper. 


* The rise in ALUMINIUM prices was capped as production in China picked up 5.5% on year to 3.17 mln tn, which indicates production of 102,300 tn per day.


"This was the third consecutive month in which Chinese smelters manufactured more than 100,000 tn of aluminium per day. Looking at the year as a whole, both steel and aluminium production are clearly on track to reach record levels. Despite the solid demand, we believe that China is producing in excess of demand and is stockpiling a lot of material," Daniel Briesemann analyst at Commerzbank AG said.


* Investors are awaiting the outcome of the US Federal Reserve's policy meeting starting today. 


 * Following are key highlights of trade in base metals today:


  At 1615 IST, on MCX, the Sep futures contract of:

  –Aluminium was at 146.10 rupees a kg, up 0.4%

  –Copper at 530.30 rupees a kg, up 0.3%

  –Lead at 150.95 rupees a kg, up 0.5%

  –Nickel at 1,124.30 rupees a kg, up 0.3%

  –Zinc at 194.60 rupees a kg, up 1.2%


* Outlook for the evening session on MCX: 

  –Sep aluminium contract – 140-151 rupees per kg

  –Sep copper contract – 519-536 rupees per kg

  –Sep lead contract – 142-156 rupees per kg

  –Sep nickel contract – 1,113-1,130 rupees per kg

  –Sep zinc contract – 189-199 rupees per kg




US$1 = 73.65 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Avishek Dutta


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