Nonferrous Metals Prices are mostly dropping with insufficient rising momentum. The Federal Reserve (Fed) announced the federal funds rate is raised by 0.25 basis points. With that, the target range is now 4.5%–4.75%. Which is the highest level since Oct 2007.
Federal Reserve chairman Jerome Powell stated, “With our expected economic forecast, I don’t think we’ll lower rates this year.” Although Powell emphasised that he doesn’t have any assurance regarding the May FOMC meeting. Risky assets that were value in dollars increase when the dollar index fell by around 100.
After a two-day meeting, the Fed issued a statement that claimed “inflation has softened some but remains elevated.”
The Fed emphasized in its statement that “ongoing (rate) rises will be appropriate” to lower annual inflation to the Fed’s target of 2%. Some economists believed the Fed to indicate “further rises” would be required, implying the Federal Reserve is about to end the cycle of rate hikes.
NONFERROUS METALS PRICES FOR 2ND FEBRUARY
Copper: The most actively traded LME 3 Month copper trading at 0.87% or $9132.50/mt, with LME inventories decreased by 1,925 metric tonnes to 72,450 metric tonnes
The spot prices barely changed from the day before. And downstream participants were uninterested in the slightly declining LME copper price. Some traders bought on dips because to the increasing LME.
Aluminum: The most actively traded LME 3 Month Aluminium traded -0.06% or 2604 $/mt, with LME Inventories falling by 4,550 metric tonnes to 399,600 metric tonnes.
After a more noticeable drop overnight after the US announced the rate rise decision. The price of aluminium decreased only little today.
However, predictions of rising demand will support the price of aluminium. The increase in interest rates in Europe and the development of electricity rationing in the province of Yunnan will be the short-term priorities.
Lead: The most-traded LME 3 Month Lead traded -0.44% or 2130$/mt. With LME Inventories falling by 25 metric tonnes to 20,200 metric tonnes.
The shipment holders were pretty active in shipping on the spot market, and there were more quotations today than yesterday. As queries from downstream participants increased, traders made purchases when the discount were high. However, several participants remained on the sidelines until lead prices indicated a clear trend. – Nonferrous Metals Prices
Zinc: The most actively traded LME 3 Month Zinc traded at 0.30%, or 3,310 $/mt. While LME Inventories decreased by 775 metric tonnes to 15,700 metric tonnes.
Although market activity have not yet taken up, interest in downstream replenishment has increased, despite some participants still being on the sidelines.
Tin: The most actively traded LME 3 Month Tin traded at 0.86% or 29,205 $/mt. And LME Inventories rose by 15 metric tonnes to 3,045 metric tonnes.
Tin prices on the LME’s spot market did not exhibit a strong trend. And demand for downstream purchases was moderate, particularly while several participants were still on holiday.
Nickel: The most actively traded LME 3 Month Nickel traded at -1.05%, or 28,695 $/mt. While LME Inventories fell by 414 metric tonnes to 48,672 metric tonnes.
Nickel on the LME decreased in price but remained high. However, because the upstream players were ready to sell, the spot market premiums were low. The market transactions marginally improved.
In Delhi Metal Market, by 1500 GMT, The prices for copper scrap was 696+GST Per/kg. Aluminium scrap to 167+GST Per/kg, and zinc scrap to 214+GST Per/kg, Tin Ingots to 2475+GST Per/kg, “Shree Metal Prices” reports- Delhi Metal Market
China NBS NON-Manufacturing and Composite PMI
China’s NBS Non-Manufacturing PMI jumped significantly from 41.6 in December 2022 to 54.4 in January 2023. Due to the easing of the zero-Covid policy, this was the service sector’s first growth in four months and its highest rise since June of 2022.
China’s NBS – Composite PMI Output Index increased from 42.6 in December 2022 to 52.9 in January 2023.
The International Monetary Fund (IMF) increased its projection for global growth in 2023. As a result of unexpectedly strong demand with in United States and Europe, declining energy prices.
And China’s economy restarting after epidemic restrictions were lifted. Profits made by China’s industrial companies fell by 4.0% yoy at CNY 8.40 trillion for 2022, following a 3.6% decrease in the year before.
This decline was due to the continuing effects of prolonged anti-COVID efforts as well as a worsening real estate downturn.
Due to protests & blockades that are beginning to disrupting red metal production in the midst of a severely constrained global supply. The giant Chinese owned Las Bambas copper mines in Peru. Which regularly supplies 2% of the world’s metal, may stop operating this week.
Since early December, the Andean nation. Which is the second-largest copper producer in the world, has experienced an increase in social unrest, with major mines being targeted by road blockades & protester violence. This has primarily affected copper transportation instead of production.