Metals soften in FY24, crude oil hardens in the international market

While demand trends in the domestic market for metals have remained strong in FY24, prices have moderated in the international market. The London Metal Exchange Index fell for the second consecutive year shedding 6 per cent in FY24. Most base metals, except tin, have ended lower in the last two years. 

Says Gnanasekar Thiagarajan, director, Commtrendz Research, a leading metal consulting firm, “Metals are still struggling to find momentum due to poor demand barring copper. However, speculative funds are building longs now on all dips in copper (bellwether for metals demand) as they are convinced about the supply deficit and the Fed rate cuts that is expected to boost consumption for metals globally.” 

Energy markets have witnessed a divergent trend with crude oil prices rising while the natural gas and coal market saw another year of falling prices.Crude oil prices were up 8 per cent while natural gas prices were down 45 per cent. This decade has been a bad one for natural gas with its prices falling seven out of ten years.

Thiagarajan of Commtrendz Research says that energy markets got a boost from Middle East tensions and supply worries lifting prices higher from lows made in early January. But, weak demand still persists and the US might not prefer gasoline prices to rise as election nears. So, we could see a limited upside in crude oil, he adds.