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Daily Base Metals Report

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US stocks fluctuated today on the mixed economic backdrop. Biden’s new $1.9tr stimulus proposal is already facing hurdles from congressional opposition, complicating a smooth start to his term. The dollar remained range-bound, and the 10yr US Treasury yield picked up higher to 1.0835%. Meanwhile, China ended the year on a good note, growing by 6.5% y/y in Q4, highlighting the country’s fast recovery due to early containment measures. On the coronavirus front, the EU has set a goal of 70% population to be vaccinated by summer, while the UK is considering relaxing lockdown restrictions in March, as its rate of COVID-19 deaths just became the highest in the world (this is based on a 7-day average of new daily coronavirus deaths per million people).

LME metals have been mixed, with aluminium, zinc and lead lower on the day. Copper prices firmed on the back of positive Chinese economic and industrial data, testing the resistance at $8,050/t to close at $7,971.50/t, the cash to 3-month spread has tightened once again to -$10.50/t. Nickel was bid below $18,250/t and closed lower at $18,056/t. Aluminium traded lower to the $1,970/t support level and closed at $1,972/t. Zinc lost the most ground, testing the key support level of $2,680/t to close at $2,682/t. Lead was weaker today, closing at $1,996.50/t. Iron ore futures remained broadly unchanged, closing at CNY1,061/mt.

Oil futures continue to edge lower on virus fears and a stronger dollar. At the time of writing, WTI and Brent trade at $52.23/bl and $54.91/bl. Precious metals traded higher, with gold and seen at $1,838.65/oz and $25.02/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.

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