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Daily Base Metals Report

Policy Normalisation Back on BoJ Agenda

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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

  • BOJ signals normalisation with ETF sales.
  • Base metals were mixed on Friday as markets sought a new equilibrium after a volatile week
  • Gold rebounded; oil slipped.

Macro

US equities opened higher on Friday, hovering near record levels after a week dominated by the Federal Reserve’s widely anticipated 25bps rate cut. Attention now turns to next week’s GDP and inflation figures, which investors will use to gauge the likely course of monetary policy through year-end. Forward swaps currently suggest the market expects two additional quarter-point reductions before December. The dollar index strengthened against major currencies, trading above 97.5, while the 10-year Treasury yield climbed toward 4.13%.

In Asia, the Bank of Japan left its benchmark rate unchanged at 0.5% but signalled a cautious shift towards policy normalisation by announcing plans to gradually reduce its vast exchange-traded fund portfolio, which is valued at more than ¥75 trillion. Under the new approach, the central bank will begin selling roughly ¥620 billion of ETFs annually, using a phased schedule designed to avoid destabilising markets. The sales will likely be executed in small, predictable tranches and may be coordinated with market participants to limit price distortions. While the pace of sales is modest relative to the BOJ’s total portfolio, the shift marks an important symbolic step away from ultra-loose policy. Selling ETFs has a similar effect to raising rates in that it reduces liquidity and withdraws a safety net from equities, preparing the ground for potential rate adjustments in the future.

Base Metals 

Base metals closed the week with mixed results across the complex as individual metals sought a new equilibrium following a week of volatility. Aluminium started the day strong but faced resistance above the previous high of $2,700/t, leading to a correction back to $2,671.50/t. In contrast, copper maintained the previous day's support level at $9,940/t and climbed to $9,989/t. Lead and zinc experienced slight declines, with lead falling to $1,996.50/t and zinc to $2,889/t. Meanwhile, the cash-to-3-month zinc spread continued to tighten, now in backwardation by $55/t - its highest level since October 2024. This trend highlights the increasingly tight market conditions, which we believe could push zinc prices back to $3,000/t. Nickel remained stable at $15,271/t, while tin rebounded to $34,172/t.

Precious Metals and Oil

Gold regained Thursday’s losses, moving back above $3,664/oz, while silver pushed higher, approaching recent peaks at $42.6/oz. Oil prices retreated, with WTI testing support around $63.0/bbl and Brent easing to $67.0/bbl.

All price data is from 19.09.2025 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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