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Daily Base Metals Report

Mixed Inflation Data Keeps Markets Stable

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Senior Research Analyst

Contact research Contact Industrial Commodities

Summary

  • US stocks recovered as inflation concerns eased.
  • Base metals continued to soften, with rising LME inventories eroding support for prices.
  • Gold stabilised, while oil and silver moved lower.

Macro

US equities opened higher on Wednesday, recovering from Tuesday’s decline as softer inflation data tempered concerns around a hawkish Federal Reserve. June’s Producer Price Index (PPI) surprised to the downside, remaining flat on the month. Year-on-year, the index slowed to 2.3% from 2.7% in May. The figures highlight an uneven inflation picture, with tariff-related increases in goods such as communication equipment offset by weakening demand in services. A slowdown in consumer spending, particularly on travel, and a drop in foreign tourist arrivals point to growing caution among households and businesses. Despite the softer data, the dollar extended its rally for a twelfth consecutive session, pushing the dollar index to 98.9. US Treasury yields edged lower, with the 10-year slipping back below 4.4%.

In the UK, June CPI surprised to the upside, rising to 3.6% YoY, its highest reading in over a year. The increase was driven by higher costs for fuel, air travel and rail fares. The inflation print prompted a modest repricing in rate expectations, with markets now seeing slightly lower odds of a BoE rate cut in August. Sterling strengthened in response, sending the EURGBP cross lower to 0.865.

Base Metals

Base metals continued to weaken despite a pause in the dollar’s recent gains, as position unwinding across the copper curve pressured the broader complex. Copper prices remained stable above $9,600/t, but the cash-to-3-month spread stayed in a deep contango at -$59/t, reflecting ongoing stock builds. Rising LME copper inventories suggest that material scheduled for the US is being rerouted back to the LME ahead of the impending tariff deadline. LME copper stocks continue to rise as material is rerouted back to the exchange, with the window to ship in time to meet COMEX tariff deadlines quickly closing. This suggests that speculative positioning tied to US copper tariffs is losing momentum. 

Alongside a firmer dollar, this is undermining price support across base metals. Spreads for other metals have also eased, with the entire complex now in contango, indicating a broader lack of immediate market tightness. Aluminium edged lower to $2,577.50/t, as zinc held above the $2,700/t support, settling at $2,711/t. Lead continued to weaken, breaking firmly below the $2,000/t mark to $1,976.50/t. in prices dropped following the announcement that Wa mines in Myanmar is set to resume mining operations, falling to $32,799/t.

Precious Metals and Oil

Gold was little changed, holding near $3,325.50/oz following Tuesday’s drop. Silver slipped further, dipping below $37.60/oz as a strong dollar continued to weigh on sentiment. Oil prices declined, with WTI falling to $65.70/bbl and Brent to $67.90/bbl, amid concerns over demand and broader macro uncertainty.

All price data is from 16.07.2025 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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