Commodity Market Updates, March 5: Crude oil, aluminium rise due to supply concerns amid West Asia tensions

Crude oil futures

Crude oil prices on Thursday, March 5, rose by ₹185 to ₹7,055 per barrel, shadowing the surge in global oil prices amid escalating hostilities in the Middle East.

On the Multi-Commodity Exchange (MCX), crude oil for April delivery traded higher by ₹185, or 2.69%, at ₹7,055 per barrel in 2,385 lots.

Globally, West Texas Intermediate crude was trading 4.19% higher at $77.79 per barrel, while Brent crude rose 3.87% to $84.55 per barrel in New York.

Crude prices have been rising ever since the US and Israel attacked Iran. In retaliation, Iran hit several US military bases across the Middle East and fired missiles at Israel.

The war presents a risk to the oil supply chain as the Iranian regime announced the closure of the Strait of Hormuz. About 20% of the global oil supply passes through the narrow waterway, making it the world’s most critical oil chokepoint.

Aluminium futures

Aluminium prices surged nearly 1.47% to ₹338.50 per kg in futures trade as speculators built up fresh positions amid a positive trend in the spot market.

On the MCX, the price of aluminium for delivery in April increased by ₹4.90, or 1.47%, to ₹338.50 per kilogram in 194 lots.

Reports suggest that owing to the ongoing war in the Middle East, Qatalum, a major aluminium smelter jointly owned by Hydro and Qatar Aluminium Manufacturing Co., has started a controlled shutdown of its aluminium production after its gas supplier signalled a forthcoming halt in gas supply.

Analysts say that a controlled shutdown of the smelter at Qatalum could be positive for Indian aluminium producers, as buyers would look for alternative options to source aluminium.

The price of aluminium in international markets surged to a fresh 52-week high in the London Metal Exchange on Wednesday. Aluminium futures on LME surged as much as 2.55% to hit a 52-week high of $3,418.50.

Copper futures

Copper prices declined by ₹6.25 to ₹1,224 per kilogram in the futures trade, weighed down by muted demand in the domestic spot market.

On the MCX, copper for April delivery slipped by ₹6.25, or 0.51%, to ₹1,224 per kg in a business turnover of 208 lots.

Traders said subdued domestic demand from consuming industries weighed on copper prices in futures trade, as per a PTI report.

Zinc futures

Zinc prices advanced marginally by ₹1.40 to ₹331.45 per kg in futures trade due to higher spot demand.

On the MCX, zinc contracts for April delivery edged up by ₹1.40, or 0.42%, to ₹331.45 per kg with a business turnover of 111 lots.

Traders attributed the rise in zinc futures to higher bets by participants, according to a PTI report.