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Daily Base Metals Report

Tariffs Weigh on Sentiment, But Impact is Muted

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Global trade tensions flare as Trump unveils auto tariffs.
  • Base metals faced moderate selling pressure, with aluminium breaching the $2,600/t support level for the first time since January.
  • Gold rallied to record highs on rising uncertainty.

Macro: 

US stocks opened lower as markets reacted to Trump's announcement of a 25% tariff on all imported cars and light trucks, set to take effect on 2 April. The news triggered a sharp sell-off in the auto sector, with shares of American, Japanese, European, and South Korean carmakers falling—General Motors dropped by more than 8%. Market sentiment was further dampened by heightened uncertainty surrounding the scope of the tariffs, the possibility of exemptions, and how other nations might respond. Several countries across Asia, Europe, and North America have warned they may retaliate, raising fears of a broader trade war. Even as Q4 US GDP surprised to the upside at 2.4%, the dollar weakened against major currencies, with the index sliding to 104.2. Meanwhile, the 10-year US Treasury yield edged closer to 4.4%, reflecting persistent concerns over trade and inflation.

Base Metals: 

Base metals saw mixed market performance, with those under bearish pressure contracting strongly. Tariff news does not seem to have influenced market sentiment as expected, as copper continued to decline despite tightening conditions in the COMEX/LME arbitrage. This suggests that traders regard the $10,150/t resistance level as strong. As noted in previous comments, we believe that a substantial increase in demand is needed to break above this level, and tariffs alone are insufficient. Copper remained below the $10,000/t mark, falling to $9,845/t. Aluminium continued to weaken and after breaching the $2,600/t level, it faced intensified technical selling pressure, resulting in a sharp correction to $2,557/t. Zinc also weakened, dropping to $2,901/t. However, lead managed to hold firm, maintaining support at $2,050/t. 

Precious Metals and Oil: 

Safe-haven demand resurfaced amid tariff tensions, sending gold back to record territory, testing $3,060/oz. Silver also rallied, reaching its highest level since October at $34.4/oz. Oil prices fell, with WTI slipping below $70/bbl and Brent trading at $73.8/bbl.

Lme Metals Price And Volume 27032025

All price data is from 27.03.2025 as of 17:30

Disclaimer

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