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Daily Base Metals Report

Positive US Economic Data Lifts Confidence

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Better-than-expected housing data boosted market confidence, leading to a rise in US stocks and the dollar.
  • Despite the continued widening of the COMEX/LME arb, copper rejected prices above the psychological $10,000/t threshold.
  • Oil jumped higher due to expanding sanctions against Iranian crude.

Macro

US stocks climbed higher once again as positive economic data boosted investor confidence, despite yesterday's comments from Jerome Powell that downplayed growth prospects in light of recent tariff developments. We believe today's renewed confidence stems from a prior correction in US economic expectations, where markets overestimated recession risks despite only a slight dip in labour figures. This could suggest that markets could start to stabilise at current levels before seeking further catalysts for price gains. A crucial point to note is the upcoming changes to tariffs from the Trump administration. Attention will focus on early April when the exemptions for tariffs on Mexican and Canadian exports expire. We believe that further shifts in the tariff narrative will likely shake market confidence more than consistent implementation as investors struggle to price in many uncertainties and plan long-term strategies.

In the meantime, US existing home sales exceeded expectations, increasing at an annualised rate of 4.2%, while the initial jobless claims indicated a stable labour market performance. The US dollar gained momentum but struggled above the key 104 resistance level, while the 10-year US Treasury yield held its nerve at 4.23%. Elsewhere, despite the BOE keeping interest rates unchanged at 4.50% and emphasising a cautiously dovish approach, the pound weakened against the dollar, struggling to break above the psychological 1.3000 resistance level. 

Base Metals

Base metals were softer today in part due to a stronger dollar. While the COMEX/LME arb continued to widen, reaching new highs, LME copper rejected prices above the $10,000/t mark, indicating uncertainty about sustaining prices above this critical threshold. As per our comment yesterday, we believe that the markets will need a stronger fundamental push, in the form of improved demand conditions, to push prices significantly past the $10,120/t level. This moderate risk-off sentiment trickled through to the rest of the complex. Aluminium remained within the $2,650-2,700/t range, as zinc weakened back to $2,918.50/t. Lead sold off, rejecting prices above the $2,100/t resistance level. 

Precious Metals and Oil

Oil futures jumped higher after the US ramped up sanctions against Iranian crude, prompting WTI and Brent to reach $68/bbl and $71/bbl, respectively. Gold and silver weakened following the US housing data, edging lower to $3,039/oz and $33.45/oz.

Lme Metals Price And Volume 20032025

All price data is from 20.03.2025 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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