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Daily Base Metals Report

Daily Base Metals Report

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Authors
Daria Efanova

Daria Efanova Head of Research

Contact research Contact Industrial Commodities

Credit Suisse received a CHF50bn credit line from the Swiss National Bank today, but that struggled to push the markets significantly higher, posting marginal gains instead. We suspect investors are being mindful of other potential banking weaknesses, paying attention to other sector news to help drive the confidence. While this has weighed on monetary policy tightening expectations, the ECB, the first major bank to respond following the crisis, raised the interest rates by 50bps, citing a robust sector performance. ECB’s Lagarde provided little indication of the next move, which is set to take place in May. The German 2yr yield jumped higher but struggled to breach the 2.60% level as markets remained cautious. The hawkishness spilled over to the US market, where forward swaps are now showing hiking expectations edging back to 25bps. The dollar and the 10yr US Treasury yield remained broadly unchanged.

Another day of macro-driven momentum for the base metals complex, with prices settling marginally lower day on the day despite a softer dollar. The support levels are holding firm, and we maintain the view of “drift, not collapse” and expect marginal softness in the coming weeks as markets await positive demand news out of China. Aluminium remained low, testing the support level of $2,270/t, and settling slightly lower at $2,267.50/t. Likewise, copper dipped below the $8,500/t level but struggled below it and resurfaced back to $8,518/t. Lead remained broadly unchanged, closing at $2,066.50/t. We expect some lead inventory accumulation to take place until the end of the month, given the gradual slowdown of battery company production; many are becoming pessimistic about the downstream orders from battery consumers.

Oil futures found support at the $67/bl and $73/bl levels for WTI and Brent, respectively, following yesterday’s selloff. Precious metals gave back some of yesterday’s gains but still remained elevated; gold and silver now trade at $1,918/oz and $21.56/oz, respectively.

Lme Metals Price And Volume 16032023

All price data is from 16.03.2023 as of 17:30

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