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

Daily Base Metals Report

Read disclaimer

Stocks rallied today amid investors optimism surrounding headline economic data, and as a result, improved earnings. The VIX has declined from last week's highs of 27.59 to 19.78, this is below the YTD average of 21.53. Housing data in the US was marginally softer than expectations, with housing starts at 1.569m, down 9.5% m/m, and building permits at 1.760m, both for April. The dollar index broke back below 90 and trades at 89.90 at the time of writing, the US 10 year yield trades at 1.67%, while the UK and German 10 yrs trade at 0.866% and -0.105%, respectively. Data in Europe confirmed a decline in employment for Q1 by 2.1%, with GDP at -1.8% y/y, and -0.6% Q/Q for Q1. The trade balance for March 13bn in March, down from 18.4bn in February. 

On the LME, all prices were higher except for aluminium which witnessed some selling pressure. Ali failed above $2,500/t which prompted a close on $2,478/t, the cash to 3-month spread settled at $30.25/t. Tin was well supported today and broke back above $30,0000/t to close at $30,595/t, the spread remains in a deep backwardation at $2,475/t. Appetite for Zinc prompted a test of $3,110/t, but prices failed above this level and we closed at $3,057/t. Lead was bid towards $2,205/t, this triggered a close at $2,228.5/t. Copper found support this afternoon to test appetite at $10,525/t but the market weakened into the close to $10,405/t. Copper has weakened after the LME close and the cash to 3-month spread remains in contango at $28.75/t. 

 

Energy markets have sold off this afternoon after Brent tested $70/bl earlier today, following a report that there has been progress on the Iran Nuclear deal. Brent trades at $67.7/bl, down 2.4%, with WTI at $64.5/bl. Silver failed to hold onto the day's highs and trades at $28.20/oz at the time of writing, with gold unchanged at $1,866/oz ahead of the Fed minutes tomorrow.

 

All price data is from 18.05.2021 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.

Weekly Report FX Options

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

FX Monthly Report December 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we focus on China, highlighting the fundamentals for the macroeconomy, as well as any changes to the PBOC in the coming months. The recent cut in the risk reserve requirement suggests monetary loosening. We also outline the movement between the onshore and offshore currency for those looking to arbitrage or hedge their exposure. This analysis gives an indication of the average width of the spread what key levels to look out for.

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?