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Daily Base Metals Report

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The US stocks staged a moderate recovery today after a day of a sharp sell-off that was sparked by fears over a second wave of coronavirus infections building in the US. In response, Jerome Powell reiterated his pledge to focus on return to strong US labour market. The yield on a 10-year Treasuries rose to 0.6903%, after slipping by as much as 25% this week, and the dollar fell. The UK economy shrank by 20.4% in April, the record monthly contraction, as sectors were shattered by coronavirus lockdown.

Sentiment on the LME was positive; aluminium and zinc were the only ones closing lower on the day. Copper prices were firmer; however, gains were moderate, closing above support of $5,700/t at $5,784.5/t. Lead gained the most ground, closing at $1,757.5/t. Cash to 3m spread softened to -$16.90/t. Nickel prices were well bid today but, failed above $12,800/t level and closed at $12,665/t. Aluminium and zinc closed on the back foot, at $1,585/t and $1,977/t respectively.

Fears of second-wave injections derailing economic recovery combined with renewed worries about supply kept oil futures volatile today. WTI and Brent trade $36.20/bl and $38.83/bl at the time of writing. Precious metals were mixed, as silver dropped to $17.53/oz and gold was slightly stronger on the back of continued uncertainty. At the time of writing, gold trades at $1,734.79/oz.


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