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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 today on the back of better-than-expected US data, confirming once again the underlying strength of the economy. US retail sales grew by 3.0% in January, marking the fastest increase in almost two years, led by motor vehicles, furniture and restaurants sales. Likewise, US homebuilder sentiment improved in February by most since mid-2020, as mortgage pressures have slowed. All the recent data releases point to the resilience of the US economy and with inflation slowing at a slower-than-expected pace, this reaffirms the Fed’s hawkishness for H1’23. The market is now pricing in a 26bps increase in March and 21bps in May. The dollar strengthened to 103.90, and the 10yr US Treasury yield edged to 3.79%. The pound weakened to 1.20 on the back of a slower-than-expected inflation figure. The slower pace of inflation is set to differ between Europe and the US, given the sharper original impact the energy crunch had on European economies; we expect this trend to prevail in the coming month, but upwardly sticky core inflation will provide the support for the overall figure in 2023.

Base metals’ sentiment soured following the recent macroeconomic releases from the US, with metals closing lower on the day. We have seen building an appetite for April contracts for copper, given it is a traditionally high output season from China, and with appetite in the region slow to recover so far, the upside is being priced in slightly further in the quarter in comparison to what we have seen at the start of the year. Aluminium continued to weaken for the fourth straight day, falling to $2,384.50/t. Copper struggled above $9,000/t, settling at $8,857.50/t. Lead and zinc closed at $2,052.50/t and $3,018.50/t, respectively. Iron ore futures continue to be supported above $120/mt, settling slightly higher today at $123.29/mt.

Oil futures weakened following the EIA’s report that crude inventories grew by 16m barrels last week; WTI and Brent softened into $77/bl and $84/bl. Precious metals weakened once again, with gold and silver falling to $1,835/oz and $21.60/oz.

Lme Metals Price And Volume 15022023

All price data is from 15.02.2023 as of 17:30

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