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Daily Base Metals Report

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US stocks softened yesterday. US inflation rose by 6.2% y/y in October, the fastest growth since 1990, as supply chain disruptions and strong demand continue to attribute to rising inflationary pressures; the month-on-month figure has picked up to 4-month highs. This should further worsen consumers’ purchasing power, which is already diminishing, outlined by the jump seen in energy bills in October. The price of electricity increased by 6.5% y/y, the highest jump since 2009, while gas utilities were up by 28%. US mortgages, however, dipped below 3.0%, following the recent decline seen in Treasuries. The dollar rallied. The 10yr US Treasury yield increased up to $1.5204%, and the 10yr TIPS rose to levels last seen in August. The short-term debt, in particular, was significantly hit by the inflation data with 2yr Treasury yields rallying up to test 0.5%.

Base metals fluctuated on the back of the US inflation figures. Nickel rallied in the second half of the day, testing resistance at $19,820/t, closing at $19,754/t. Aluminium was well bid above $2,570/t for most of the day, closing higher at $2,578/t; cash to 3-month spread tightened into -$18.50/t. Lead and zinc were mostly range-bound but closed higher on the day at $2,338.50/t and $3,292/t, respectively. Copper fluctuated but closed below the support level of $9,550/t at $9,533/t. A key event is the meeting between Joe Biden and President Xi next week.

Oil futures declined, with WTI falling to $82.81/bl as crude inventories in the US rose. Brent softened into $84.09/bl. Precious metals shot up in the second half of the day, with silver rallying up to $25.02/oz, gold was up to $1,857.92/oz.

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

LME Closing Prices and Volumes

All price data is from 11.11.2021 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.

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