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Daily Base Metals Report

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US stocks were mixed ahead of the major corporate earnings results today. The dollar weakened into 90.230, and the 10yr US Treasury yield strengthened up to 1.0347%. In Asia, the stocks were lower after China’s central bank withdrew cash from the banking system and cautioned about a pricing bubble. On the vaccine front, the WHO stated that the vaccine coverage would not reach a point that would stop the transmission of the virus in the near future. Meanwhile, IMF increased the world economic growth forecast for this year to 5.5% from 5.2% in October, as vaccine hopes and continued fiscal support outweigh resurgence of the infections spread.

Activity on the LME was mixed today, with only nickel and zinc closing marginally lower. Lead was well bid in the second half of the day, but failed above $2,080/t and closed at $2,078/t. Aluminium was slightly firmer and closed near the day’s highs at $2,020/t. Copper prices were stronger on the day, closing on the front foot at $8,008.50/t. Nickel broke the support level at $18,100/t but closed higher at $18,057/t; cash to 3-month spread widened out to -$50.01/t. Zinc was the biggest mover, losing 2.3%, closing lower at $2,656.50/t. Iron ore prices were lower on the day, closing at CNY1,044/mt.

In line with US stocks, oil futures fluctuated on expectations of wavering Chinese demand ahead of the New Year holiday. At the time of writing, WTI and Brent trade at $52.47/b and $55.79/bl. Precious metals were mixed, with gold down to $1,853.51/oz and silver up to $25.50/oz respectively.


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