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Daily Base Metals Report

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U.S. stocks declined yesterday after the market speculated on the implications of a change in the Fed leadership. The dollar was marginally unchanged, and the 10yr U.S. Treasury yield fell into 1.4271%, September lows. US PPI accelerated further in October, up to 8.6% y/y, driven in large by the high cost of goods, meanwhile, Chinese factory inflation soared to 12.3% y/y, a 26-year high. Both indicators point to no ease in price growth, and this should add further pressures on CPI readings this month.

LME prices continued to weaken as investors digested the weakening property market in China. Aluminium was subject to moderate selling pressure in the second half of the day, piercing the support level at $2,560/t and closing higher at $2,556.50/t. Copper tested resistance at $9,700/t before closing at $9,553/t. Lead and nickel prices were softer, closing at $2,339.50/t and at $19,401/t respectively. Tin and zinc prevailed, closing marginally higher on the day, at $37,408/t and $3,281.50/t, respectively. All metals except aluminium are in backwardation, outlining the tight physical market and low stocks.

Oil futures rose after the statement that President Biden will be looking into the EIA’s outlook report to address the rising energy prices. WTI and Brent traded at $82.92/bl and $84.94/bl. Precious metals softened, with only gold marginally higher on the day at $1,825.92/oz; silver traded at $24.17/oz.

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

All price data is from 09.11.2021 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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