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Daily Base Metals Report

Retaliatory Tariffs Spark Stronger Market Reaction

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Market sentiment remained fragile as trade tensions escalated, with retaliatory tariffs fuelling uncertainty.
  • Base metals strengthened due to a softer dollar and the reversal of tariffs back to 25% on Canadian aluminium and steel.
  • Gold and silver broke out of recent ranges, while oil prices rebounded above key levels.

Macro

US stocks opened higher today after yesterday’s declines, but the Dow Jones quickly erased early gains as countries announced retaliatory measures against Trump’s latest tariffs on steel and aluminium, which took effect today. The European Union responded with countermeasures worth €26 billion, while Canada imposed 25% retaliatory tariffs on an additional $29.8 billion of US goods, set to take effect on Thursday. Market sentiment remains fragile as investors fear that escalating trade tensions could deepen economic uncertainty and potentially tip the US into a recession. Notably, markets have reacted more strongly to retaliatory measures than to Trump’s initial tariff announcements, reflecting growing scepticism over the credibility of his shifting trade policies. On the economic front, US inflation data came in softer than expected, with headline CPI easing from 3.0% to 2.8% YoY in February, while core inflation softened from 3.3% to 3.1%. However, given the intensifying trade war, concerns over renewed inflationary pressures persist. The dollar fluctuated throughout the session, trading slightly lower at 103.4 at the time of writing, while the 10-year US Treasury yield climbed above 4.3%, reaching 4.31%.

Base Metals

Base metals gained momentum today, driven by a combination of reversed metal tariffs, retaliatory tariffs from the EU, and weaker US inflation, which supported a risk-on appetite in the market. A softer dollar also contributed to the upward momentum. As mentioned in our previous comments, markets have become somewhat desensitised to tariff announcements from the US, and retaliatory actions are now more likely to evoke a market reaction as they seem to carry more conviction.

In the meantime, easing inflationary pressures and delays in the tariff implementation have alleviated some consumption concerns, further supporting price momentum. Copper demonstrated notable strength, rising to test the November 2024 high of $9,782/t before retreating slightly to $9,770/t. Lead surged above all three moving averages, reaching $2,082/t. Nickel remained above $16,500/t, while aluminium struggled to break significantly higher, closing the day at its opening price of $2,702.50/t.

Precious Metals and Oil

Gold broke out of its recent range, rising past the $2,930/oz resistance level and approaching $2,940/oz. Silver followed suit, surging to $33.25/oz—its highest level since mid-February. Oil prices also gained, with Brent reclaiming the $70/bbl mark, while WTI rose to $67.7/bbl.

 Lme Metals Price And Volume 12032025

All price data is from 12.03.2025 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.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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