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Daily Base Metals Report

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

US stocks opened lower today, kicking off a week where all eyes will be on the upcoming CPI data, which is expected to provide further insights into the Fed’s future policy direction. In Europe, the ECB is widely anticipated to lower interest rates by another 25bps on Thursday as it continues its easing cycle to support the struggling Eurozone economy. In Asia, data from China showed November CPI at 0.2% YoY, down from the previous month and below market expectations of 0.4%. The weaker-than-expected inflation data highlights persistent deflationary pressures in the Chinese economy, raising concerns about the effectiveness of recent policy measures. The dollar softened slightly, dipping just below the 106.0 level, while the 10-year US Treasury yield edged higher to 4.19%.

Base metals started the week on a positive note, buoyed by an encouraging announcement from Chinese policymakers signalling a more accommodative monetary and fiscal policy stance for 2025. In particular, the government pledged a more proactive fiscal approach, raising expectations that the economy will widen the fiscal deficit from 3% next year and improve borrowing conditions. While this marked the clearest and most direct language on stimulus in many years - boosting Chinese stock markets - the response in the metals market was more muted.

We attribute this cautious reaction to lingering doubts surrounding the region’s long-term growth prospects, particularly in the construction sector. We believe it will take more than just stimulus measures to fully rejuvenate economic growth. Still, the overall market sentiment was moderately bullish today. Copper climbed above the $9,200/t level, while tin jumped higher to the $30,000/t resistance level. Moves elsewhere were less pronounced: aluminium edged back below $2,600/t, and nickel remained broadly below the $16,000/t mark at $15,996/t. 

Precious metals gained momentum as last week’s increased expectations of a Fed rate cut next week continued to drive demand. Gold advanced to $2,672/oz, while silver surged above the key $32.20/oz level. Oil prices also rose, with WTI trading at $68.80/bbl and Brent crude at $72.60/bbl, respectively.

Lme Metals Price And Volume 09122024

All price data is from 09.12.2024 as of 17:30

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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