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

Daily Base Metals Report

Read disclaimer

US stocks edged higher yesterday, led by the incline in the tech companies. The US initial jobless claims fell unexpectedly to fresh pandemic lows of 444,000 in the week ending May 15, rekindling optimism about the economic recovery outlook. Philadelphia Fed survey showed that producers continue to accelerate input cost in May, with the price index now at the highest level in 40 years. The dollar declined, and the 10yr US Treasury yield softened to 1.6318%. European equities rebounded from a two-week low, with financials and carmakers paving the way. Meanwhile, Italy approved a EUR40bn stimulus package that extends the support from the impacts of the pandemic. From the virus front, a Japanese government approved Moderna and AstraZeneca vaccines for use, yielding a total of three available vaccines in the market.

LME metal prices were on the front foot today, apart from nickel and aluminium, which closed lower on the day. Zinc prices were well supported and tested resistance at $2,980/t; prices closed lower at $2,959.50/t. Lead was well bid in the second half of the day, testing the resistance level of $2,220/t, before closing below at $2,217/t; the cash to 3-month spread tightened up to $6.50/t, after widening out to $9.00/t on Wednesday, a December 2020 high. Copper advanced, following the previous day slump, as expectation of stronger than expected demand supported prices above $10,000/t, the metal closed at $10,048/t. SHFE copper prices, however, weakened, closing at CNY73,070/mt; the next day, prices continued their decline to CNY72,980/mt. Nickel prices remained marginally supported above $17,200/t for most of the day but broke below that level and closed lower at $17,148/t.

Oil scraped earlier gains after Iran said that a deal to end sanctions on its oil had been reached. WTI and Brent edged down to $63.01/bl and $66.26/bl. Precious metals were mixed, with gold and silver up on the day, to $1,881.03/bl and $27.99/bl, respectively.

All price data is from 20.05.2021 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 July 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. Cryptocurrencies are the focus of this month's FX Monthly report. The report includes a macroeconomic overview as well as desk comments and technical analysis on key currency pairs.

Quarterly Metals Report – Q3 2021

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.