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Daily Base Metals Report

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Authors
Daria Efanova

Daria Efanova Head of Research

Contact research Contact Industrial Commodities

US stocks opened lower today as the market turned its attention to banks' disappointing corporate earnings results, but positive economic data carried the sentiment higher during the day. Following yesterday's inflation, today's University of Michigan data confirmed the market's sentiment for continued price decline, with the 1yr ahead expectations falling to 4.0%, the lowest in two years, while the 5-10yr inflation is set to remain above target at 3.0%. The dollar edged higher after four consecutive days of declines, and the 10yr US Treasury yield settled at 3.46%. Elsewhere, European stocks are set to close the week higher today, marking the strongest two weeks of January on record. Lower forecasted temperatures and, in turn, softer energy prices have eased consumer concerns surrounding the deep energy crisis that was anticipated to take place this winter. Japan's 10yr yield spiked higher above the 0.5% ceiling amid speculations that the central bank might review the impacts of the loose monetary environment.

In line with the stock market, base metals saw sentiment improve in the latter part of the day following the inflation expectation data release. This highlights the metals' sensitivity to macro data, given the absence of news from China. Still, data points to a continued slowdown in the nation's trade sector. Chinese exports declined once again in December, falling by 9.9% y/y. While this is higher than the market originally anticipated, the trend still highlights the softening global demand outlook for Chinese goods. Aluminium jumped higher but failed to break above the psychological resistance of $2,600/t as it settled at $2,595/t. Copper fluctuated but managed to settle higher at $9,185.50/t. Tin, in particular, saw robust gains on the upside as the metal closed at $28,756/t. Lead and zinc closed higher at $2,251/t and $3,324/t, respectively.

Oil gained ground once again following the reports that China issued import allowances for crude purchases, bringing WTI and Brent prices to $79/bl and $84/bl. Gold and silver remained broadly unchanged, at $1,911/oz and $24.05/oz, respectively.

All price data is from 13.01.2023 as of 17:30

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