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Daily Base Metals Report

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US stocks fluctuated on the back of mixed corporate earnings reports. The dollar softened marginally, and the 10yr US Treasury yield weakened for the fourth straight day. UK gilt 10yr yield fell to 0.985% after Chancellor of the Exchequer Sunak said the economy is on track to grow at the fastest rate in nearly 50 years, but inflation remains a threat. In comparison, Germany cut its growth outlook to 2.6% this year before gaining ground in 2022 on the back of softer supply pressures and easing impacts from the pandemic. China’s industrial profit growth picked up to 16.3% y/y in September, mostly driven by higher input prices.

Another day of stronger declines on the LME market yesterday, after the latest measure from the Chinese government to cap coal prices. Aluminium saw the biggest decline, down 5.50% on the day, the eighth consecutive decline, as it breached the key support level of $2,800/t to close at August levels at $2,686/t. Likewise, zinc fell below the support level of $3,400/t to close at $3,335/t. Copper managed to find support above $9,500/t but still closed lower on the day at $9,548/t. Nickel tested resistance at £20,400/t in the first half of the day before selling off to $19,400/t support level; the metal closed at $19,412/t. Lead closed at $2,384.50/t; cash to 3-month spread has widened out to $35.25/t.

Oil futures declined yesterday after an unexpected rise in US crude inventories. WTI and Brent traded at $83.24/bl and $84.93/bl, respectively. Precious metals were mixed, with gold marginally higher on the day up to $1,794.43/oz, while silver declined to $24.10/oz.

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

All price data is from 27.10.2021 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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