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Daily Base Metals Report

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US stocks declined on Monday as markets weighed on concerns of a pullback of stimulus and the resurgence of COVID-19 cases. US consumers’ expectations for inflation rose to an 8-year high in July, pointing to a 3.7% increase in prices in three years’ time. The dollar pushed higher, and the 10yr US Treasury yield edged up to 1.3186%. Elsewhere, Chinese bond yields gained ground after inflation data for both consumer and producer prices came in above expectations in July.

Metal prices were weaker yesterday on the back of discussions of pullback of stimulus support in the US. Copper prices sold off to test appetite at $9,300/t, but support at that level triggered a close at $9,369.50/t. Nickel saw the strongest selling yesterday but was supported above $18,600/t and closed at $18,620/t. Aluminium was under pressure, closing at $2,549/t, and the cash to 3-month spread widened out to -$9.23/t. Zinc tested the $2,946/t level in the second half of the day and closed near the day’s low at $2,951.50/t.

Oil futures fell to the lowest level in three weeks on continued concerns surrounding the delta variant. WTI and Brent declined to $66.58/bl and $69.05/bl. Gold sold off to touch March lows of $1,690/oz, with silver falling to the levels of $22.62/oz last seen in November 2020; both edged higher later on in the day.

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

All price data is from 09.08.2021 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.