1. Reports
  2. Daily Base Metals Report
Non-independent Research

Daily Base Metals Report

Read disclaimer

US stocks started the week on the back foot amid the surge of coronavirus cases. Trump has urged the officials to recalculate the election results over the two Senate seats in Georgia, which could help determine whether the Democrats will have full control over the Congress; this shift would help set the scene for a much clearer path for Biden’s agenda. Meanwhile, the US 10-year breakeven inflation rate has broken above 2.00%, the highest level of expectations since 2018. The dollar edged down to 89.892 the 10yr US Treasury yield softened out to 0.9082%. Elsewhere, Scotland will implement another national lockdown, while England is under pressure to follow suit as the spread of infections accelerates. Germany’s manufacturing IHS PMI grew at the fastest pace in 30 months in December, highlighting the outlook for improving industrial sector.

All LME metals advanced today as a weaker dollar and improving demand outlook set the scene for higher prices. Aluminium prices were firmer, however lack of appetite above $2,040/t, triggered a close at $2,031.50/t. Copper prices tested the resistance of $7,950/t and closed at $7,860.50/t. Nickel saw the biggest growth, trading up to $17,520/t, the highest level in nine months, and closed just below the day’s high at $17,404/t; cash to 3-month spread widened out to -$60.00/t. Likewise, lead prices opened on the front foot today, breaking through the key resistance level of $2,040/t to close at $2,051.50/t. Iron ore prices were higher on the day on the back of shrinking port stockpiles in China, closing at CNY999/mt.

Oil futures fell today ahead of the OPEC+ meeting on supply cuts. At the time of writing, WTI trades at $47.64/bl and Brent is seen at $51.13/bl. Gold surged above $1,900/oz, growing by above 2% today, on the back of declining US yields and a weakening dollar; silver was up by 3.25%. At the time of writing, gold and silver trade at $1,940.30/oz and $27.16/oz respectively.

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.

Sign-up to get the latest Non-independent research

We will email you each time a new report has been published.

You might also be interested in...

Daily Report FX

A morning report covering fundamentals and technicals for USD, EUR, GBP, JPY, and CHF.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning.

FX Monthly Report December 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we focus on China, highlighting the fundamentals for the macroeconomy, as well as any changes to the PBOC in the coming months. The recent cut in the risk reserve requirement suggests monetary loosening. We also outline the movement between the onshore and offshore currency for those looking to arbitrage or hedge their exposure. This analysis gives an indication of the average width of the spread what key levels to look out for.

Quarterly Metals Report – Q4 2021

The global macro picture is starting to present some downside risks in the near term as China's economy is set to slow further and supply-chain bottlenecks continue to cap growth. New orders and new export orders in China are contractionary, and we expect demand in Q4. Order backlogs and lead times for products will continue in Q4, limiting growth, and real consumption is weaker than it looks. Higher costs from shipping, raw materials and energy will take their toll on the consumer, and we expect end-user demand to suffer. The final piece of the jigsaw is the reduction in stimulus from central banks and how that will impact financial markets, bond yields, and the dollar has rallied while stocks corrected, but what will this trend continue?