International News 15/08
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Indian Rupee Stuck at All-Time Low on Tuesday
Analysts anticipate that the Indian rupee will remain under pressure on Tuesday, driven by sustained US dollar demand from importers and rising oil prices, which are influenced by geopolitical tensions in the Middle East. Non-deliverable forward trading indicates that the rupee will open at a similar level to that of the previous day, which represented a record low for the currency. The Reserve Bank of India has been intervening to prevent a further decline in the rupee, but this is likely to continue until the situation changes. The source of the high dollar demand is unclear, but it may be linked to non-deliverable forwards, oil, or gold. Previously, oil prices had a relatively limited impact on the rupee. However, they are now playing a more prominent role. Brent crude prices have increased by over 6% since last week.
IEA maintains 2024 oil demand forecast and cuts 2025 forecast
The International Energy Agency (IEA) has confirmed its global oil demand growth forecast for 2024, while revising its forecast for 2025 slightly downward. This reduction is attributable to the impact of decreased oil consumption in China as the post-Covid economic expansion in the country reaches its conclusion. However, developed economies, particularly the United States, have been able to offset this decline, accounting for one-third of global petrol consumption. The IEA anticipates that the summer driving season in the US will be the strongest since the pandemic. Furthermore, supply cuts by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) have further tightened the physical oil market. The current supply is unable to keep pace with peak summer demand, resulting in a market deficit, according to the IEA's monthly oil report.
Aluminium prices soar, profit of Indian state-owned NALCO soars 76%
The National Aluminium Company of India (NALCO) has reported a significant increase in first quarter profits, attributed to lower costs and higher aluminium prices. NALCO's consolidated profit rose 76% to 5.88 billion rupees ($70 million) in the three months to 30 June. This was mainly due to the rise in global base metal prices, including aluminium, on supply concerns and rising demand. Despite the strong performance, the company's flagship aluminium business recorded only a modest 4% growth. On the other hand, the cost of thermal coal and bauxite, key raw materials for aluminium, fell by 35%, resulting in a 24% reduction in costs. However, NALCO's operating income fell by 10%, largely due to a 27% decline in its chemicals business. Looking ahead, experts predict that domestic demand for aluminium will remain steady.
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