Domestic base metal prices on LME witness positive trends W-o-W; Three-month LME aluminium futures hiked by 3.2%

At the close of trading on Friday, May 17, 2024, all base metals on the London Metal Exchange (LME) showed positive week-over-week trends. On the LME, three-month aluminium futures hiked by 3.2 per cent to reach $2,612 per tonne, while nickel settled at $21,080 per tonne, marking an impressive increase of 11.39 per cent. 

Aluminium price

Primary aluminium producers in India have recently raised the price of P1020 primary ingots by up to INR 3,400 per tonne, leading to a slight uptick in spot prices for P1020 ingots in the Delhi NCR region. However, aluminium scrap prices in India have remained relatively stable with minor fluctuations. Market activity has been sluggish as buyers proceed with caution.

According to BigMint's assessments, tensioned scrap from the US experienced a modest increase of $10 per tonne, reaching $1,960 per tonne, while UK-origin Zorba 95/5 was priced at $2,170 per tonne. However, spot prices for aluminium ADC12 alloy ingots have declined weekly by INR 4,000 per tonne, reaching INR 212,000 per tonne ex-works in Delhi NCR.

Tensioned scrap prices also decreased INR 2,000 per metric ton to INR 183,000 per tonne ex-Delhi, resulting in a scrap-to-ADC12 spread of INR 29,000-30,000 per tonne. Additionally, lower demand and disruptions in cash flow have been observed due to ongoing elections.

Other price

Copper prices stood at $10,668 per tonne, zinc rose 3.4 per cent to $3,031 per metric tonne, and lead prices increased 2.7 per cent to $2,283 per tonne. Throughout the week, domestic base metals markets mirrored the upward trajectory witnessed in the global market. Both imported and domestic aluminium scrap prices remained steadfast. Notably, copper, zinc, and lead prices showed significant gains, reinforcing the positive trend in the market.

According to BigMint's latest report, domestic copper armature prices in India increased 1.2 per cent weekly, reaching INR 820,000 per tonne ex-Delhi. This rise mirrored the trend seen on the London Metal Exchange (LME), which hit a two-year high, surpassing $10,300 per tonne. 

Secondary CCR rods also experienced a climb of 1.7 per cent to INR 875,000 per tonne, while primary CC rods surged by 2.2 per cent to INR 910,000 per tonne. The surge in imported scrap prices reached up to 4.8 per cent week-over-week. Wary of the high futures prices, buyers opted for local consumption strategies until prices stabilised.

Furthermore, China's copper cathode output witnessed a slight decline in April due to maintenance activities, with more smelters scheduled for maintenance in May. This maintenance schedule is anticipated to impact production levels and could potentially lead to further price hikes in the near future.

Global updates

After its initial rejection, BHP is poised to enhance its $43 billion bid for Anglo-American, potentially sweetening the deal with additional cash. Another offer is anticipated before May 22. Meanwhile, Korea Zinc is strategising to ramp up copper production to 150,000 tons by 2028, focusing on urban mining and seizing growth prospects in the US market. Unexpectedly, US factory production took a hit in April, experiencing a 0.3 per cent decline, primarily attributed to a drop in motor vehicle output. Year-over-year, manufacturing output decreased by 0.5 per cent, grappling with challenges from elevated borrowing costs.