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Daily Base Metals Report

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US stocks fluctuated on Monday as the investment mood soured. The dollar was broadly unchanged, while the 10yr US Treasury yield retreated to 1.3208% ahead of the US CPI data today, which is expected to have moderated slightly in August but remain strong year-on-year. US inflation expectations over the medium term rose to record highs, 4.0% for the next three years and 5.2% in a year’s time. US Democrats stated that they will aim to raise the corporate tax rate to 26.5%, up from the current 21%, with the goal of achieving a $3.5tr domestic investment plan.

Metals on the LME came under heavy selling pressure yesterday, with nickel the worst affected. Protracted selling pressure caused nickel prices to find support at $19,600/t and close at $19,726/t. Copper was next in line as prices struggled above $9,750/t to close at $9,562.50/t, with the cash to 3-month spread widening out to -$12.00/t. Aluminium tested $3,000/t - a 13-year high - as supply disruptions in Guinea and China’s crackdown on energy-intensive industries continue to compound; the metal ended up closing lower on the day at $2,896.50/t. Zinc managed to find support at $3,060/t and closed at $3,084.50/t. Lead and tin were also lower on the day, closing at $2,293/t and $33,498/t, respectively.

Oil futures extended a rally, with crude reaching a 6-week high of $73.92/bl; WTI edged up to $70.38/bl. OPEC monthly report predicted stronger demand for its crude, based on higher global consumption alongside continued output disruptions. Precious metals were mixed, only safe havens have strengthened; gold and silver traded at $1,793.52/oz and $23.77/oz, respectively.

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

All price data is from 13.09.2021 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.

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