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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 weakened as the markets digested a slew of market data releases today. Retail sales declined by 1.1% m/m, a much sharper contraction than the markets had anticipated, marking the lowest level since February 2021; vehicles and spending at petrol stations drove the decline, suggesting the weakness is not yet indicative of consumer weakness. At the same time, producer prices and capacity utilisation declined faster than expected, falling by 0.5% and 0.7% m/m, respectively, highlighting the underlying demand softness in the industrial sector. The dollar continued to decline, and the 10yr US Treasury yield dropped below 3.50%. UK inflation eased for a second month, as it grew by 10.5% y/y in December; while petrol prices are declining from their highs, food gains drove the underlying performance. The BOJ pushed against the market expectations, as it kept the main policy rate unchanged and the target for the 10-year yields under the curve control programme at 0.5%. The yen has manged to fight back following the immediate sell off, settling at 128.47.

Base metals continued this year’s trend, with prices strengthening across the board as the weaker-than-expected US economic data is giving more room for the Fed to ease the rate of hikes. Aluminium continued to break higher but struggled above the resistance level of $2,620/t and settling at $2,638/t; the cash to 3-month spread continued to tighten, testing the November high at -$21.50/t. Likewise, copper continued to edge higher, settling at $9,323.50/t. Nickel opened higher on the front foot, jumping by $1,260/t on the open, but traded slightly lower from the highs during the day to $27,844/t. Lead was the only metal that closed lower at $2,183/t. Zinc closed at $3,405/t.

Oil futures gained a footing on the back of a positive demand outlook, driving WTI and Brent to $81/bl and $87/bl. Precious metals failed to hold up the earlier gains, with gold and silver settling slightly lower at $1,907/oz and $23.80/oz, respectively.

Lme Metals Price And Volume 18012023

All price data is from 18.01.2023 as of 17:30

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