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"Quote - Base Metals" by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

With the conclusion of the month of June, we have reached the end of the first half of the year and the April-June quarter. The performance of the base metals pack has been disappointing. Over the past six months, LME Nickel experienced the highest decline, down by 34 percent, while LME Copper was minimally affected, with a marginal decrease of 0.1 percent.

In terms of the June month performance, there was a slight upward movement in metals such as LME Zinc, Lead, and Copper, with Zinc being the top performer. Despite this uptick, negative sentiments continue to prevail in the metals market, mainly influenced by the extended slowdown in the manufacturing sector in China, the United States, and the Eurozone, as indicated by the respective economies' PMI numbers.

In June, the manufacturing downturn in the Eurozone worsened, primarily due to the European Central Bank's ongoing policy tightening, which put a strain on finances. Similarly, manufacturing in the United States declined further, reaching levels last seen during the initial wave of the COVID-19 pandemic. The manufacturing PMI has remained below the contraction level for eight consecutive months.

Base metal prices declined due to a steady dollar as U.S. Federal Reserve agreed to hold interest rates steady at the June meeting to buy time and assess whether further rate hikes would be needed, even as the vast bulk expected they would eventually need to tighten policy further, according to the recently released Fed minutes. 

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