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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

US stocks’ moves were lacklustre today as markets braced for the Fed decision tomorrow, with policymakers expected to deliver 25bps worth of hikes. If the hike materialises, we expect investors to start pricing in the outlook for the year-end decisions, and Fed’s subsequent minutes will be key in assessing the pathway for the central bank. We are now entering the peak of the earnings season, and most of the companies that have reported so far have outperformed according to market expectations, creating a solid base for a “soft landing” for the US economy. Indeed, consumer confidence strengthened to a 2-year high of 117 in June on the back of a solid job market and easing inflationary pressures. The dollar remained at 101.40, and the 10yr US Treasury yield held steady.

Solid growth was seen across all base metals today after Chinese leaders pledged more support for the economy at this week’s Politburo meeting. This, alongside the last Fed hike, would help solidify longer-term support levels. However, we do not suspect the impact to be long-lasting, and market focus should shift back to the fundamental and macroeconomic picture in the near term, which could bring prices slightly lower from this week’s highs. As of today, construction-heavy materials benefitted the most from the news, with copper, in particular, gaining more than $150/t on the day, breaking above $8,600/t to close at $8,673.50/t. Likewise, nickel surged above the $22,000/t resistance level to June highs of $22,395/t. Zinc gained ground but struggled to break above the robust support of $2,500/t, closing at $2,488/t. Aluminium closed at $2,240/t. Iron ore remained the primary beneficiary of China’s policy news, gaining ground above $115/mt.

Oil futures held on to three-month highs of $79/bl and $83/bl for WTI and Brent, respectively. Precious metals fluctuated but edged higher in anticipation of the last hike of this tightening cycle from the Fed. Gold and silver are now trading at $1,964/oz and $24.60/oz, respectively.

Lme Metals Price And Volume 25072023

All price data is from 25.07.2023 as of 17:30

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