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Daily Base Metals Report

Markets Steady Ahead of US Reciprocal Tariff

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Markets held steady, with attention focused on reciprocal tariffs from the Trump administration.
  • Aluminium and copper continued to weaken as the COMEX/LME arb tightness levels off. 
  • Gold remained elevated in the face of trade uncertainty. 

Macro

US stocks gapped lower on the open this morning but quickly rebounded as markets struggled to breach through recent lows. Attention is focused on tomorrow's reciprocal tariff announcements from the Trump administration, which have heightened concerns about their impact on the US economy and global trade. While we do not expect tomorrow's announcements to provide detailed specifics on targeted goods, a general announcement should clarify which segments will be affected. In response to this situation, the EU has stated that it will implement a wide range of targeted measures to retaliate against the US, further adding to the uncertainty in the bilateral relationship between the two economies. As a result, the US dollar index has remained steady above 104.

In the meantime, Eurozone inflation softened in line with expectations, growing by 2.2% YoY in March vs 2.3% in February. While close to approaching the central bank target, a moderate pricing growth month-on-month prompted markets to pare back their bets for the ECB's cutting cycle for 2025, reducing the chance of an April cut to 77%. 

Base Metals

Despite the looming threat of tariffs, the metals most affected by these tariffs continued to weaken. Aluminium contracted for the eighth consecutive day, dropping to $2,507/t. Copper edged lower to $9,693/t, as the COMEX/LME arb plateaued at around 16%. This indicates that the markets are not convinced about the severity of the tariff's impact, and the shorter tariff window is limiting further opportunities for increased shipments to the USS. Likewise, zinc corrected to $2,822/t. In contrast, tin remains an exception; it strengthened after an earthquake in Myanmar threatened the largest tin ore mine. The price of tin jumped to $37,479/t, reaching a level not seen since August 2022.

Precious Metals and Oil

Oil futures fluctuated as markets awaited tariff announcements. Gold has also held its nerve at an all-time high at $3,117/oz.

Lme Metals Price And Volume 01042025

All price data is from 01.04.2025 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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