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Metals Today: Base Metals Headed for Biggest Monthly Gains on Strong Demand

26 Feb 2021 8:30 am
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Mumbai (Commodities Control) - All the base metals are in correction mode in early Asian trading hours on both LME and SHFE on account of month end profit booking on the recent rally.

Metals are also weighed by gain in the dollar index from multi-week lows in the previous session.The dollar index is trading at 90.34 recovering from below 90 mark saw in the previous session.

However, the fundamentals such as tight supply, falling inventories, rising cancelled warrants and rebounding economy are very strong for further rise in all the metals.

Metals have surged on expectations that a years-long era of low inflation in key users may be ending, with stimulus measures and near-zero interest rates fueling demand and weakening the dollar as economies recover from the pandemic.

Copper

LME 3-M copper is trading lower for the second consecutive trading session on Friday extending previous session losses on profit booking. LME copper has staged a biggest monthly gain in February in the history rising from a monthly low of $7713 per ton to a monthly high of $9615 per ton. SHFE copper hit a high of CNY 70570 per ton from a low of CNY 55240 per ton.

Copper is benefiting from outlooks that government pledges to invest in green infrastructure and electric-car incentives will further aid consumption.LME 3-M copper contract is trading at $9264 per ton and SHFE near-month contract is trading at CNY 68180 per ton.

Copper stocks at LME registered warehouse fell to 78575 tons on Thursday from 79700 tons on Wednesday.

MCX copper is projected to correct today towards Rs. 710 per kg.

Lead

LME 3-M and SHFE lead is trading down by more than 1% on Friday as dollar gained strength against major currencies.

Buyers in the trade market have a bearish attitude towards the spot lead prices, and they are mostly on the sidelines.

According to International Lead and Zinc Study Group (ILZSG), the global lead market surplus increased to 223,000 tons in 2020 with production at 11,750 thousand tons while consumption was 11,527 thousand tons.

LME lead is trading at $2126 per ton while SHFE lead is trading at CNY 15585 per ton.

Lead stocks at LME registered warehouse increased to 94700 tons from 94475 ton on Wednesday.

MCX lead is projected to correct towards Rs. 175 per kg.

Zinc

Zinc is showcasing a steady trading on both LME and SHFE with slightly negative bias tracking price trend in the entire base metals complex.

According to International Lead and Zinc Study Group (ILZSG), the global zinc market surplus increased to 533,000 tons in 2020 with production at 13641 thousand tons while consumption was 13108 thousand tons.

LME 3-M zinc contract is trading at $2862 per ton and SHFE near-month contract is trading at CNY 21495 per ton.

Zinc stocks at LME registered warehouse fell to 270475 tons on Thursday from 270525 tons on Wednesday.

MCX zinc is projected to trade in the range of Rs. 228 – Rs. 232 per kg.

Nickel

LME 3-M nickel is trading on steady note while SHFE nickel is in red in early Asian trading hours on Friday.

LME nickel fell to one-week low on Thursday retreating from multi-year high as dollar gained strength against major currencies.

Indonesian Nickel Miners Association (APNI) said that the recovery of the COVID-19 vaccine and vaccination will improve nickel production and sales this year.

LME 3-M nickel contract is trading at $19030 per ton and SHFE near-month contract is trading at CNY 140720 per ton.

Nickel stocks at LME registered warehouse fell to 251058 tons on Thursday from 251226 ton on Wednesday.

MCX nickel is projected to witness a choppy trend and trade in the range of Rs. 1370 – Rs. 1390 per kg.

Aluminium

LME 3-M aluminium is trading near 2-year high while SHFE aluminium is trading on a steady note on strong consumption demand from China.

Better-than-expected economic data from the United States in the form of weekly initial jobless claims, preliminary GDP are supporting the rise in the aluminium prices.

LME 3-M aluminium contract is trading at $2209 per ton and SHFE near-month contract is trading at CNY 17340 per ton.

Aluminium stocks at LME registered warehouse fell to 1332525 tons on Thursday from 1337700 tons on Wednesday.

MCX aluminium is projected to advance the positive trend towards Rs. 185 per kg in the short term.



       
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