Commodity Market Updates, May 6: Crude oil falls 10% as geopolitical tensions ease; copper, zinc rise

While zinc and copper prices advanced on the domestic exchange, zinc prices declined.

Crude oil futures

Domestically, crude oil futures for April delivery declined as much as ₹997 or 10.28% to hit an intraday low of ₹8701 per barrel (bbl) on the Mult-Commodity Exchange (MCX) on Wednesday, May 6, tracking global prices.

In the international market, Brent crude oil contracts for expiry in June fell as much as 7.65% to an intraday low of $101.46 per bbl.

This comes as US President Donald Trump announced the pause of 'Project Freedom,' in which the US Navy was escorting ships out of Iran amid the Strait of Hormuz closure.

Furthermore, the latest media reports suggested that the US Secretary of State, Marco Rubio, in an announcement on Tuesday, indicated that the initial US military operation in the US-Iran conflict is coming to an end.

Copper futures

Copper futures for June delivery rose by ₹21.60 or 1.66% to the session’s peak of ₹1,324.45 per kilogram on the MCX, amid improved sentiment as the conflict in the Middle East de-escalated.

At around 3:52 PM, the contract was trading 21.10 or 1.62% higher at ₹1,323.95 per kilogram, as against the closing price of ₹1,302.85 per kilogram in the previous session, in 2,805 lots.

Copper prices have also been supported by supply-side risk, as the Middle East conflict squeezed the supply of Sulphuric acid, a chemical ingredient serving as a primary reagent for extracting and processing copper from ore.

As per reports, China was expected to restrict the export of sulphuric acid as the Middle East conflict affected sulphur supplies to the country. China accounts for a quarter of the global production of sulphuric acid.

Aluminium futures

Aluminium contracts for delivery in June declined as much as 1.92% to touch an intraday low of ₹367.05 per kilogram, compared to the closing price of ₹374.25 per kilogram. It was trading in the positive territory earlier.

At the time of writing, the aluminium contract was trading 1.51% or ₹5.65 lower at ₹368.60 per kilogram.

Zinc futures

Zinc contracts for the expiry in June advanced marginally by ₹2.95 to ₹348.25 per kilogram in futures trade due to higher spot demand.

On the MCX, zinc contracts for June delivery edged up ₹2.95, or 0.19%, to ₹348.25 per kg with a business turnover of 18 lots.

As per a PTI report, traders attributed the rise in zinc futures to higher bets by participants.