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Daily Base Metals Report

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US futures fluctuated today as the spread of COVID-19 infections continued to mute economic outlook. US stocks were closed today for Thanksgiving holiday, and the markets will close at 6pm tomorrow (London time) for Black Friday. Despite a number of vaccines passing substantial approval hurdles, the sentiment turned sour today, as the virus toll continued to climb. In the Fed’s Minutes yesterday, the bank discussed the guidance on its bond-buying strategy but did not provide any concrete set of plans. The dollar strengthened up to 92.051 and the futures on 10yr yield on US Treasuries picked up higher to 0.8816%. The European shares followed suit on the back of rising possibility of a closure of ski resorts this winter.

LME metal prices were on the front foot today on positive investor sentiment. Aluminium trended higher today in the first half of the day, before falling lower to close at $1,976/t. SHF aluminium prices, however, weakened, edging near record highs, closing at CNY15,825/mt. Copper prices were well supported and tested resistance at $7,410/t, the level last seen in December 2013, and closed just off the highs at $7,402.50/t. Nickel was well bid in the second half of the day, breaking through the resistance level of $16,250/t, before closing below at $16,058/t; the cash to 3-month spread tightened into to -$40.00/t. Zinc prices remained supported above $2,740/t before closing at $2,760.50/t. Iron ore was on the front foot, closing at CNY888.50/mt, breaking record highs.

Oil futures slipped from 8-month high as rally subsided today, with WTI and Brent trading lower to $44.94/bl and $47.72/bl. Precious metals were once again mixed; at the time of writing, gold and silver trade at $1,809.10/oz and $23.34/oz.


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COVID cases are rising across the globe as the delta variant spreads, this is causing some nervousness in financial markets, especially with the higher inflation rhetoric. Commodity prices have fallen since the Fed changed their tune inflation, the dollar has stabilised which has also been a headwind to prices. The summer months are traditionally quieter for metals demand which could prompt metals to consolidate. If the delta variant continues to spread, we may see higher levels of stimulus for longer. As things stand stimulus levels are set to be tapered and this could be brought forward if inflation remains high. We expect markets to remain volatile but on lower volume through the summer months.