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

After ending the previous week on a mixed note, the following week was no different as the industrial metals pack ended on a mixed note, with Copper and Nickel being the only metal ending on a higher note.

Although there was some downward pressure on copper prices, the reddish-gold metal nevertheless managed to close higher due to expectations of strong Chinese demand that overshadowed concerns about interest rate increases and sluggish economic growth.

Metals like aluminum and zinc, the week was highly volatile. After production at a Dutch smelter was halted due to Europe's high electricity prices, zinc jumped to its highest levels in two months. This comes after major producer Glencore Plc, citing Europe's increasing electricity prices, earlier this month issued a significant supply threat warning.

On the other hand, the PBOC surprisingly reduced its interest rate for the second time this year in a bid to increase credit demand and promote growth, which restrained the downside. But the COVID-19 lockdowns and energy restrictions in some regions of China might have an effect on the production of metals.

Outlook: While the production of metals remains uncertain given the high energy costs, the downside remains capped after China slashed its interest rates in order to promote demand and growth

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