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Daily Base Metals Report

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Positive sentiment continues to drive the stock market, with S&P 500 seen touching a record high, despite a weak economic backdrop. The US jobs data disappointed, as it increased by just 49,000 in January, with the jobless rate falling to 6.3%; weekly hours worked jumped. This data is likely to pressure Biden to push for additional stimulus checks soon. The 10yr US Treasury yield strengthened up to 1.1497%, while the 2yr yield touched the lows last seen in May 2020; the dollar softened. On the COVID-19 front, data shows that Chinese vaccine administration to population share falls considerably behind the US and Europe, delivering a little more than two doses for every 100 people. Meanwhile, Russia is in talks with China to test a combination trial of their shorts to better protect against the virus.

Prices on the LME were seen higher today as risk appetite prompted the market. Aluminium prices broke above $2,015/t, with prices seen closing at $2,015.50/t. Aluminium cash to 3-months tightened up to -$3.25/t. Nickel saw the strongest gains today, breaking above $18,000/t to close at the day’s highs at $18,029/t. Tin rallied, heading for a record weekly streak, as concerns over diminishing supply drive the market; the metals tested $23,200/t before closing lower at $23,123/t. Copper prices also strengthened today; prices closed near the day’s high at $7,912.50/t. SHF copper closed on the front foot at CNY57,900/mt. Zinc was supported in the first half of the day, testing $2,670/t to close at $2,665.50/t. Lead range-bound, closing marginally higher on the day at $2,052.50/t.

Oil futures climbed today, with Brent falling short of $60/bl, as global supply expectations continue to tighten. At the time of writing, WTI and Brent trade at $56.79/bl and $59.37/bl. Precious metals were higher on lacklustre US labour data boosting the need for a greater stimulus; gold and silver are seen at $1,814.59/oz and $27.03/oz respectively.


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