Metals gain on decline in dollar, LME's possible ban on Russian supplies

Metals have witnessed a positive turnaround in the day and for this week as the US dollar declined from its 20-year high. Dollar index has been down by nearly 2-2.50 points, supporting metal prices.

Also, China's factory activity eked out growth in September, but a slowdown in services sector growth and a downbeat private manufacturing survey pointed to further cooling as the economy grapples with COVID-19 curbs and softening global demand.

China seems to be refilling stocks as well as the country is headed for a national holiday from the first to seventh of October. So, there has been some buying ahead of that.

Also, infrastructure projects are picking up in the country and there is demand coming in from renewables as well.

Markets are also watching out for the latest debate that seems to be happening around the London Metal Exchange, which could potentially ban Russian metals.

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Copper prices have risen 2 percent this week and inventories in Shanghai declined by 78 percent since the month of March. On a monthly and a quarterly basis, copper is down nearly 8 percent for the month and it is down by nearly 10 percent for this current quarter.

Aluminium prices are off their 17-month lows but have declined by nearly 7 percent for the month of September.

Zinc is down 15 percent in September while nickel is down 9 percent. On a monthly basis metals are closing in the negative, however, on a weekly basis there is some buying seen in the sector.

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