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Daily Base Metals Report

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Global stocks were mostly higher, whilst the US is off celebrating Thanksgiving after the Fed minutes pointed to willingness to taper purchases at a faster rate to keep inflation in check. The officials have also stated that the range for the fed funds rate might be raised sooner than expected if inflation keeps running hot. The dollar futures softened. Meanwhile, China’s State Council called to sell more special bonds this year as means of boosting liquidity, as it aims to lessen the use of monetary policy tools. Germany grew by less than expected in Q3 due to weaker government spending, further complicating the outlook for Q4, which is likely to be even weaker given the current outbreak of COVID-19 cases.

Volumes were weak yesterday due to Thanksgiving; metals prices consolidated this morning but were sold this afternoon after China’s late-night session. Aluminium found support above $2,700/t for most of the day before closing marginally higher at $2,717.50/t; the cash to 3-month spread tightened marginally to $8.50/t. Lead was also seen higher on the day, closing before the resistance of $2,290/t at $2,270.50/t. Copper weakened, testing support $9,750/t before closing slightly higher at $9,801.50/t. Likewise, nickel and zinc lost ground closer to the day-end, closing at $20,667/t and $3,300.50/t, respectively. Iron ore prices suffered the most, with SGX contact falling down below $100/mt, as it struggled to gauge appetite for prices above this level.

Oil futures slipped after OPEC stated that tapping into reserves from the US and others might swell the surplus of crude globally, and as a result, some members have indicated a possibility of cancelling an output hike during the next meeting in January. WTI and Brent traded at $78.13/bl and $82.24/bl. Gold and silver were range-bound, edging marginally higher to $1,789.99/oz and $23.64/oz, respectively.

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

LME metals price and volume

All price data is from 25.11.2021 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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