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Daily Base Metals Report

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Stocks edged higher yesterday, supported by Powell’s statement that the economy needs more support, and the labour market recovery has a long way to go. The US new home sales picked up in January to a three-month high as low mortgage rates continue to drive the demand. The 10yr US Treasury yield climbed past a one-year high of 1.4%. The dollar strengthened, while Swiss France weakened as much as 0.5% against the euro to hit the lower level since October 2019. On the vaccine front, the J&J vaccine shows to be safe and effective, while the vaccine developed in Wuhan is shown to be 72.5% effective against COVID-19. Elsewhere, Germany grew by 0.3% in Q4 2020, proving to be more resilient to coronavirus than expected.

LME metal prices were on the front foot today, apart from zinc, which closed lower on the day at $2,846.50/t. Nickel prices were well supported and tested resistance at $19,755/t and closed just off the highs at $19,709/t. Aluminium was well bid in the second half of the day, breaking above the resistance level of $2,180/t, before closing below at $2,184.50/t; the cash to 3-month spread tightened up to -$11.50/t. SHFE aluminium prices strengthened, closing at CNY16,630/mt. Copper prices remained supported above $9,150/t before closing at $9,308.50/t. Tin and lead were range-bound but closed higher on the day at $26,700/t and $2,124/t respectively.

Oil futures advanced as the US oil output dropped below 10m b/d amid freezing conditions in Texas. Meanwhile, European crude stockpiles fell to the lowest level since September. At the time of writing, WTI and Brent trade at $63.54/bl and $67.42/bl. Precious metals were mixed; gold is seen lower at $1,797.33/oz, while silver edged up to $27.76/oz.

*All price data is from 24.02.2021 as of 17:30

*All price data is from 24.02.2021 as of 17:30


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COVID cases are rising across the globe as the delta variant spreads, this is causing some nervousness in financial markets, especially with the higher inflation rhetoric. Commodity prices have fallen since the Fed changed their tune inflation, the dollar has stabilised which has also been a headwind to prices. The summer months are traditionally quieter for metals demand which could prompt metals to consolidate. If the delta variant continues to spread, we may see higher levels of stimulus for longer. As things stand stimulus levels are set to be tapered and this could be brought forward if inflation remains high. We expect markets to remain volatile but on lower volume through the summer months.