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Daily Base Metals Report

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US equity index futures opened the week on the front foot, as investors weighed on the possibility of another hawkish stance by the Fed, despite Friday’s US jobs report that pointed to continued recovery in the labour market, but not strong enough to warrant the earlier-than-expected stimulus tapering. The dollar softened and the 10yr US Treasury yield edged higher to 1.4238%. Markit services PMI for China was expansionary but grew at the slowest rate since April 2020, meanwhile in Europe, continues to grow, with the June figure at the 15-year high.

LME metal prices were on the front foot today, apart from aluminium and lead, which closed lower on the day at $2,556/t and $2,286.50/t respectively. Copper prices were well supported and tested resistance at $9,535/t and closed lower at $9,511/t. Nickel was well bid, testing the resistance level of $18,500/t, before closing below at $18,412/t; the cash to 3-month spread widened out to -$0.50/t. Zinc prices remained supported above $2,940/t before closing at $2,945.50/t. Iron ore surged higher during the day to close at CNY1,349/mt.

Oil futures rose for the fourth straight day after OPEC+ producers called off another meeting to discuss UAE’s position on oil supply. WTI and Brent traded at $75.95/bl and $76.86/bl. Precious metals were mixed, with gold higher at $1,790.90/oz and silver down to $26.45/oz.

For more in-depth analysis of base and precious metals, please see our Quarterly Metals Report.

All price data is from 05.07.2021 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.