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Daily Base Metals Report

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US stocks fluctuated today on the back of Georgia runoffs, the results of which are now likely to appear tomorrow. US manufacturing expanded at the fastest rate in more than two years in December, supported by the strongest growth in production since 2011. The dollar weakened, and the 10yr US Treasury yield edged higher to 0.9582%. Chinese stocks continued to rise, breaking the 5-year highs, marking a recovery from one of the worst equity crashes. Elsewhere, Europe is negotiating with Pfizer to nearly double the supply of COVID-19 vaccines to the region that continues to see a rise in infections.

Increasing risk appetite across LME metals prompted another day of gains. Aluminium prices were well-supported, testing the resistance level at $2,050/t and closed at $2,040.50/t, the cash to 3-month spread has widened out to -$4.00/t. SHFE Aluminium, however, was down on the day, closing at CNY15,455/mt. Nickel trended higher to break above the resistance at $17,600/t before closing at $17,682/t. Copper saw the largest rally to $8,000/t and closed $8,002/t. Lead was stronger today, closing at $2,081/t. Zinc prices were on the front foot in the second half of the day, edging up to $2,830/t to close lower at $2,813/t.

Oil futures advanced today as OPEC+ seems to draw close to an oil output plan. At the time of writing, WTI and Brent trade at $49.81/bl and $53.12/bl. Precious metals were on the front foot, with gold and silver edging up to $1,848.51/oz and $27.43/oz respectively.


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