Local demand raises base metals prices
The February futures contract for copper rose 5.75% to Rs 432 a kg since the start of this year on the Multi Commodity Exchange of India.
The February futures contract for copper rose 5.75% to Rs 432 a kg since the start of this year on the Multi Commodity Exchange of India. The price may touch Rs 438-440 a kg in the short term, traders said.
“Copper prices in the domestic market will remain firm owing to strong demand, a weak rupee and strong international cues,” said Shreegopal Kabra, MD of RR Global, a wire manufacturing company. The cost of imported copper is likely to rise by Rs 15 per kg, said Kabra, former president of the Indian Electrical & Electronics Manufacturers’ Association. “Electrical vehicles will be the next game-changer for copper demand,” he said. Zinc price have increased 10.88% to Rs 191a kg, lead by 5.42% to Rs 148 a kg, nickel by 17.45% to Rs 870 a kg and aluminium by 4.56% to Rs 134 a kg, analysts said. “Lower supplies and higher demand for base metals, which are used in electrical equipment like fans, refrigerators, ACs, batteries and coolers, will increase prices with the onset of summer,” said Anuj Gupta, deputy vice-president of commodity research at Angel Broking.
“Pressure on the dollar is also giving support to the base metals and the US Federal Reserve will most likely keep rates steady this year.”
Peak domestic industrial demand for copper and aluminium will start picking up from March-April, traders said. Himanshu Gupta, VP and head of commodities and currency research at Globe Capital Market, said copper prices are expected to be firm in the short term.
“Key factors leading to the price hike include positive sentiment in the market with the Chinese premier visiting the US, along with the latest liquidity measures taken by the Chinese central bank to boost demand,” he said.