Indian base metals jump on weak dollar

MUMBAI - Indian base metals futures rallied by more than a percent on Friday, bolstered by gains in global equities market and speculative buying triggered by a weak dollar, analysts said. Copper futures surged higher and the most-traded November copper on the Multi Commodity Exchange of India (MCX) was up 0.91 percent at 320.30 rupees a kg, at 3:15 p.m. "Dollar is very low so investors are taking some bargain-hunting," Pranit Kumar, an analyst with Indiabulls Commodities Pvt Ltd, said. The dollar stayed under pressure near record lows against the euro and a basket of currencies, attracting commodity buyers by making prices comparatively lower in other currencies. Industrial action at Southern Copper in Peru set to start next week also underpinned prices. Analysts also expected some Chinese demand to push prices up, ahead of the Golden week holiday. Shanghai market will be shut all next week for National day celebrations. Copper stocks in London Metal Exchange-monitored warehouses were down 175 tonnes at 130,775 tonnes on Friday. Inventories have fallen about 6 percent this month. "It is trading at a record high. The November contract hit a high of 321.30 rupees but soon came off. However, we expect prices to fall as long-term fundamentals are not favourable," an analyst with a Mumbai-based commodity brokerage said. ZINC MCX zinc futures rose as traders covered their short positions ahead of expiry of the September contract on Saturday. Prices also soared on lower stocks and expectations that demand from steel makers could pick up by end-September, analysts said. At 3:15 p.m., the September contract was up 0.89 percent at 124.30 rupees a kg. Stocks in the LME-registered warehouses were 61,350 tonnes, down 500 tonnes from Thursday. LEAD MCX lead futures were supported by news of supply disruptions in major smelters in Mexico and Australia, analysts said. Long-term supply disruption at the Magellan lead mine in Australia, which produces 3 percent of the world's mined lead, also helped. At 3:15 p.m., MCX September contract was up 0.87 percent at 139.30 rupees a kg. Stocks in the LME warehouses rose by 150 tonnes to 22,150 tonnes on Friday, but were lower than the average daily global consumption. NICKEL MCX September nickel was quoted at 1,274 rupees a kg, up 0.82 percent from the previous close, and analysts expected prices to rise by the fourth quarter on likely demand from steel companies. Stocks in the LME warehouses stood at 32,442 tonnes, up 138 tonnes from Thursday.