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

Daily Base Metals Report

Read disclaimer

Another risk of day yesterday for the majority of financial markets. US equities are unchanged at the time of writing, the VIX spiked towards 25 but stands at 21.40, and is on track for the biggest rise since January, but option expiry is certainty having an impact. Investors are looking to remain cautious about the Fed tapering their asset purchases. The dollar continues to strengthen and the index trades at 93.401. Data in the U.S. saw initial jobless claims at 348,000, mortgage delinquencies for Q2 were 5.47%, down from the previous quarter at 6.38%. In Europe, the sell-off in equities was more pronounced, the euro volatility curve flattened as gamma was bid ahead of Jackson Hole next week, the front-end of the curve is expected to remain firmer. 

LME prices tumbled today due to risk-off sentiment from the Fed and a stronger dollar. Protracted selling pressure saw tin test support at $31,500/t, but settled at $33,118/t. Nickel was next in line, down over 2% and broke through support at $18,500/t to close at $18,385/t. The lead cash to 3-month spread remains in steep backwardation and settled at $208/t, the flat price stands closed at $2,260/t. Zinc failed above $2,900/t and closed at 2,951.5/t. Aluminium was comparatively muted and closed at $2,545.50/t after testing appetite at $2,516/t, but the cash to 3-month spread tightened into $16.76/t. Copper was weaker again today as traders rejected $9,100/t and the market closed at $8,894/t. 

Energy prices tumbled today due to the stronger dollar and reports that Saudi may delay supply increased, following the recent correction. Brent and WTI trade at $66.21/bl and $63.42/bl at the time of writing. Precious metals were weaker today, silver trades at $23.27/oz with gold at $1,781.17/oz. 

Geordie Wilkes, Head of Research 


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?