Commodity wrap on September 13: Crude oil, aluminium futures rise; agri pack struggles

India's commodity markets saw sharp activity in the energy and metals pack on Monday. While crude oil and aluminium futures were in high demand on Multi Commodity Exchange (MCX), nickel and rubber witnessed selling. Among precious metals, gold and silver were trading mixed.

Gold and silver futures were trading mixed Monday with the yellow metal surging Rs 54 to trade at Rs 46,860. Silver, on the other hand, was down Rs 50 at Rs 63,270.

Globally, spot gold slipped marginally to $1,791.40 as a stronger dollar ahead of the key US economic data scheduled later in the week kept the bullion under pressure. The yellow metal slipped over 2 percent last week.

"Spot Gold slipped over 2.1 percent in the week gone by as the US Dollar and Treasury yield scaled upwards. US Federal Reserve officials stated the year-end plans to trim the asset purchase program are still online despite the slow growth in the US labour market which gave strength to the US Currency," Prathmesh Mallya of Angel Broking said.

However, signs of a slowdown in China’s economy, mounting geopolitical tension and the recent outbreaks of the new variant of the coronavirus might levy some support for the safe-haven gold, he added. 

Silver also slipped nearly a percent to trade at $23.705.

Crude oil prices climbed to a one-week high as concerns over shut output in the United States, the world's biggest producer, following damage from Hurricane Ida supported the market, alongside expectations of higher demand.

Crude oil benchmarks, Brent crude futures and US WTI oil surged nearly a percent higher to $70.41 and $73.61. Both markets were at their highest since Sept. 3 earlier in the session.

Low output from the US amid the expectation of increasing demand might help oil extend the gains from the past week, Mallya said. On MCX, crude oil futures surged over a percent higher to trade at Rs 5,186.

Most Industrial metals on London Metal Exchange (LME) ended lower last week as the worries of potential shortage in the global markets underpinned the prices. Aluminium and Nickel posted the highest gains amongst the pack.

Mounting supply threats for Aluminium from top producer China has helped Aluminium prices outperform peers in 2021.

Nickel prices rose over 4 percent on the LME and over 5 percent on the MCX in the week gone by as surge in demand from the Electric Vehicle producers and the stainless-steel segment amid depleting Nickel inventories across exchanges ignited worries of potential deficit in the global markets.

However, a stronger US Dollar, prospects of tapering of the asset purchase program by the US FED and slow growth in China’s economy capped the gains for the industrial metals, Mallya said.

"A disrupted supply chain amid a promising demand outlook is expected to continue supporting industrial metal prices in the week ahead," Mallya said.

On Monday, Aluminium was trading almost a percent higher at Rs 232, whereas Nickel was down over 2 percent.

Last week, LME Copper ended higher by 2.8 percent to close at $9694.5 per tonne on LME as "bets on revival in global demand outpaced worries of bleak demand prospects from China and supported the red metal prices," Mallya said.

Copper was trading lower on Monday on MCX at Rs 739. "Mounting worries of shortage in the global markets amid prospects of a surge in demand might continue to support industrial metals," Mallya added.

Cottonseed oilcake for delivery in September was trading marginally higher Monday. Castor Seeds were trading over half a lower whereas Mustard Seeds over trading a percent lower.

Guar Seeds rose over 4 percent tracking firm physical market trends as traders raised their bets. Chana was also trading a percent lower.

Soy bean futures were trading over 0.25 percent higher whereas refined soybean oil were 0.35 percent lower.