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

Daily Base Metals Report

Read disclaimer

US stocks pulled back yesterday over concerns of being overvalued. Meanwhile, the Democrats begin the final push towards Biden’s $1.9tr stimulus bill this week before the jobless benefits expire. The dollar softened into 90.056. The 10yr US Treasury yield was little changed, while the 5-30yr yield gap touched the highest level in more than 5 years. Meanwhile, Boris Johnson laid out the plan out of the pandemic, with completely all restrictions being lifted by June. This comes at a time when COVID-19 vaccines in the UK show positive signs of containing the spread of the virus, by reducing the risk of infections by more than 70% after the first dose alone.

LME base metals rallied as investors priced in stronger growth and inflation as the number of vaccinations continues to rise. Only nickel and lead closed lower on the day at $19,493/t and $2,152/t respectively. Copper breached $9,000/t for the first time in 9 years, as expectations of tight supply relative to future demand continue to drive prices higher; the metal closed at $9,097/t; the cash to 3-month spread widened out back to $35.50/t, from rising sharply before to $49.50/t. Aluminium prices were well supported in the second half of the day and tested resistance at $2,177/t and closed just off the highs at $2,166.50/t; the cash to 3-month spread tightened to -$12.25/t. Tin was well bid, testing the resistance level of $27,000/t, before closing below at $26,615/t. Zinc prices remained supported above $2,860/t before closing at $2,899/t.

Oil futures surged as weaker dollar supported the prices. At the time of writing, WTI and Brent trade at $62.52/bl and $66.19/bl. Precious metals were all seen higher, with gold and silver edging up to $1,811.71/oz and $27.97/oz.

*All price data is from 22.02.2021 as of 17:30

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.

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?

Weekly Report FX Options

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

FX Monthly Report September 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. The report includes a macroeconomic overview as well as desk comments and technical analysis on key currency pairs.