Reuters reported that Base metal demand in India is likely to remain buoyant next week on a surge in construction activities during the winter season. However, due to an expected decline in automobile sales in December, demand for lead which is primarily used for making batteries is likely to remain weak.
Traders said that the partially convertible rupee which plays an important role in determining the prices of dollar denominated metals fell on Friday to close at 54.47 down 0.6% from Thursday.
Traders expect copper demand to rise next week as sales of heating appliances such as geysers, particularly in northern India are likely to rise with the progress of the winter.
Mr Praveen Agrawal member of the Bombay Metal Exchange said that "Rising construction activity and higher demand for heating appliances is likely to boost demand for the red metal."
On Friday, the key November copper contract on India's Multi Commodity Exchange was trading up 0.39% at INR 442.6 at 1300 GMT, tracking a weak rupee. Three-month copper on the London Metal Exchange was trading marginally down at USD 7997 per tonne from Thursday's close.
In the Mumbai spot market, copper fell INR 5.9 to INR 437.6 per kilogram from Thursday's close. Demand for Zinc used for galvanising steel, remains buoyant as construction picks up. India, the world's third-largest producer of zinc has the capacity to produce around 1 million tonnes annually.
Hindustan Zinc Limited controlled by Vedanta Resources, accounts for around 82% of the total production. The January zinc contract was trading down 0.23% at INR 109.7 per kilogram. Zinc in the local spot market fell INR 0.9 to INR 108.8 per kilogram from Thursday's close.
Traders said that an expected fall in automobile sales in December could drag down batteries sales and cut demand for lead. Added pressure could come from a decline in demand for power back-up devices which use batteries, as cold weather sets in during December.
India's automobile sales typically fall MoM in December after strong demand in November when a clutch of festivals prompts gift giving. Lead spot prices fell by INR 1.1 to INR 143.3 per kilo gram on Thursday from INR 144.4 on Monday.
HZL revises lead prices twice a week, on Monday and Thursday. The November lead futures contract on the MCX was trading down 0.79 percent at INR 119.6 per kilogram from the previous close on Thursday.
Source - Reuters
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