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Daily Base Metals Report

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US stocks finished the week on the back foot as investors weighed on the prospects of slowing growth. US personal spending accelerated to 1.0% m/m in June, more than expected, as the service industry continued to grow; the personal consumption expenditure price gauge rose by 0.5% for a second straight month. The dollar gained ground, and the 10yr US Treasury yield contracted to 1.2273%. Meanwhile, Euro area GDP grew at 2% in Q2, exceeding the median of 1.5%, with most of the rebound driven by the southern countries. German inflation jumped to the highest level since 2008 in July, as the lifting of lockdown restrictions boosted economic recovery and subsequent demand.

LME trading saw mixed appetite yesterday. Aluminium has continued to find support at $2,580/t and near the day’s low at $2,590/t. The cash to 3-month spread tightened into $42.00/t. Lead was stronger after recording a low for the day at $2,350/t; the market closed at $2,382/t. The cash to 3-months spread tightened into $14.00/t. Elsewhere, copper rejected $9,883/t and closed on the back foot at $9,728/t. Nickel closed at $19,552/t, down on the day and just below key support of $19,600/t.

Oil futures rose on the back of easing concerns surrounding the delta variant impact on demand. WTI and Brent increased marginally to $73.81/bl and $76.31/bl. Precious metals were mostly down, with gold and silver edging down to $1,819.17/oz and $25.51/oz, respectively.

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

All price data is from 30.07.2021 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.