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Daily Base Metals Report

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US stocks remained broadly unchanged yesterday after another strong inflationary data. US CPI figures climbed by 5.4% y/y in September, more than forecast, highlighting persistency in high purchasing prices. The dollar sold off, and the 10yr US Treasury yield softened towards 1.55%. The UK economy grew by 0.4% in August, less than expected, driven by softer consumer purchases. Elsewhere, China’s exports surged to a new record in September, despite power shortages at key producing regions, supported by strong winter demand and rising prices.

Another mixed day on the LME market yesterday. Copper prices firmed, testing resistance at $9,700/t to close at $9,651/t, the cash to 3-month spread has shot up to $108.50/t – the September 2008 highs – another sign of exacerbating supply issues as inventories run low. Zinc hit a 3-year high of $3,440/t after one of the biggest producers, Nyrstar, said it would cut production up by to 50% due to surging input costs; the metal closed at $3,401.50/t. Aluminium sold off to test $3,000/t at the start of the day but managed to recover to close marginally higher on the day at $3,068/t. Nickel traded higher to the $19,200/t level but closed at $18.918/t. Tin lost ground to close at $36,386/t. Iron ore pared losses on continued fears of lower output of stainless steel from China, closing at $121.21/mt.

Oil futures softened marginally after OPEC+ voiced concerns regarding global demand. Russia said that they are ready to deliver natural gas to Europe, which could help ease price concerns somewhat. WTI and Brent traded at $80.54/bl and $83.26/bl. Precious metals were higher on the back of a strong inflation report, with gold and silver strengthening into $1,794.30/oz and $23.13/oz, respectively.

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

All price data is from 13.10.2021 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.

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