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Daily Base Metals Report

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US stocks advanced today, with tech firms leading the way, on positive economic data. US ISM manufacturing PMI expanded to 56.0 in August, the fastest pace since December 2018, powered by growth in new orders. The dollar continued to soften, and the yield on 10yr US Treasuries fell into 0.6917%. Euro-area inflation came in at -0.2% y/y in August; the decline is seen for the first time in four years. The euro picked up to May 2018 highs of $1.20, supported by dollar’s weakness. Meanwhile, the Chinese factory data improved to 53.1 in August, above expectations, highlighting rising global demand for exports.

LME metal prices were on the front foot today due to improved risk-on sentiment. Aluminium prices were well supported and tested resistance at $1,825/t and closed just off the highs at $1,816.50/t. SHF aluminium, however, was lower on the day, closing at CNY14,570/mt. Nickel was well bid in the first half of the day, testing the resistance level of $15,745/t, before closing below at $15,534/t. Nickel cash to 3m spread tightened further to $24.50/t contango. Copper closed lower on the day, despite hitting a new 26-month high, closing at $6,687.50/t. Zinc and lead consolidated, closing at $2,553/t and $1,972/t respectively. Tin gained the most ground, closing just below the key resistance level of $18,200/t at $18,186/t.

Oil futures trended higher today on the news of positive economic outlook in the US along with China signalling a continued recovery in crude consumption. At the time of writing, WTI and Brent trade at $43.16/bl and $45.89/bl respectively. Precious metals were all higher today, with gold is seen fluctuating around $2,000/oz thanks to a weaker dollar. Gold and silver are seen $1,975.38/oz and $28.45/oz.


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