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Daily Base Metals Report

UK's Fiscal Measures and Market Reactions Amid Tariff Uncertainty

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Chancellor Reeves announces £14bn fiscal repair package, including welfare cuts and increased defence spending.​
  • US consumer confidence drops, while dollar strengthens and Treasury yields remain elevated.​
  • Base metals mixed; copper retreats below $10,000/t.

Macro:

US stocks declined at the opening, weighed down by a sell-off in major technology companies. Investor sentiment remains cautious amid ongoing tariff uncertainties, with markets anticipating potential policy shifts as the April 2nd deadline approaches. The dollar appreciated against major currencies, with the index holding firmly above 104.3, reflecting its safe-haven appeal amid global trade tensions. The 10-year US Treasury yield remained elevated at 4.3%, indicating persistent concerns about inflation and future interest rate trajectories.

In the UK, Chancellor of the Exchequer Rachel Reeves delivered the Spring Statement, unveiling a £14bn package aimed at addressing fiscal challenges stemming from subdued economic growth and rising borrowing costs. Key measures include £3.4bn in welfare cuts, reductions in departmental spending, and an increase in defence expenditure by £6.4bn. UK inflation figures for February showed a decline to 2.8% YoY, down from 3.0% in January, driven primarily by a 0.6% decrease in clothing prices—the first contraction since October 2021. Despite this moderation, services inflation remained steady at 5%, suggesting underlying price pressures persist. Following the Spring Statement, the Debt Management Office (DMO) announced plans to issue £299.2 of gilts in the upcoming fiscal year. The UK 10-year gilt yield initially jumped above 4.78% on the announcement but later retraced to 4.73%.

Base Metals:

Base metals experienced a mixed session. Copper retreated from recent highs, falling below the key $10,000/t level to $9,932.50/t amid profit-taking. Zinc also declined, slipping to $2,953.50/t due to softened risk sentiment, while aluminium edged slightly lower to $2,607/t, weighed down by persistent demand concerns. Conversely, nickel showed resilience, climbing to $16,265/t on renewed buying interest. Lead remained stable at $2,086/t, and tin saw marginal gains, trading at $35,071/t, supported by ongoing supply constraints.

Precious Metals and Oil:

Precious metals reflected the broader market dynamics, with gold fluctuating throughout the session before settling lower at $3,019/oz, influenced by the stronger dollar and steady Treasury yields. Silver remained mostly unchanged, holding firm around $33.7/oz. Oil prices edged higher, with WTI approaching $70/bbl and Brent reaching $74/bbl.

Lme Metals Price And Volume 26032025

All price data is from 26.03.2025 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.

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