1. Reports
  2. Daily Base Metals Report
Non-independent Research

Daily Base Metals Report

Read disclaimer

US stocks were mixed yesterday as market confidence about the global outlook softened marginally following this week's rally. US job openings jumped to the second-highest value on record, highlighting the employers' struggle to fill available vacancies. The dollar was under pressure yesterday, and the 10yr US Treasury yield rallied back up to 1.52%. Global geopolitical tensions continue to intensify after Biden spoke to Putin regarding the situation in Ukraine; both reiterated their points, but no concessions have been made. China's factory-gate inflation eased somewhat in November, as it climbed by 12.1% y/y, down from 13.5% in the previous month; if the softness persists, this should provide some relief for manufacturers into the new year. Markets are awaiting the CPI data on Friday, which is forecast to show a 6.8% y/y growth in November.

Another positive day on the LME markets yesterday, with lead and zinc the biggest movers, as smelters in China continued to suffer from the supply cuts after the introduction of regulation to curb pollution. Both metals closed higher at $2,284/t and $3,310/t, respectively. Likewise, copper strengthened in the second half of the day, testing resistance at $9,669/t and closed marginally lower at $9,652.50/t. Nickel was supported above $20,100/t and closed higher at $20,230/t. Aluminium fluctuated throughout the day, and closed lower at $2,627/t; cash to 3-month spread softened, but still remained backwardated at $4.00/t.

Oil futures were mostly range-bound, as sentiment cooled off after yesterday's rally. WTI and Brent traded at $72.51/bl and $75.93/bl. Precious metals erased earlier gains in the latter half of the day as the markets assessed the impact of omicron spread alongside growing geopolitical tensions. Gold and silver were seen at $1,782.23/oz and $22.39/oz, respectively.

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

All price data is from 08.12.2021 as of 17:30


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.

Sign-up to get the latest Non-independent research

We will email you each time a new report has been published.

You might also be interested in...

Daily Report FX

A morning report covering fundamentals and technicals for USD, EUR, GBP, JPY, and CHF.

Weekly Report FX Options

Commentary and analysis covering OTC currency option pricing, volatility and positioning.

Daily Report Softs Technical Charts

Technical analysis and charts for the key sugar, cocoa and coffee contracts.

FX Monthly Report December 2021

Monthly commentary covering the FX markets, providing insights on recent developments on select currency pairs. This month we focus on China, highlighting the fundamentals for the macroeconomy, as well as any changes to the PBOC in the coming months. The recent cut in the risk reserve requirement suggests monetary loosening. We also outline the movement between the onshore and offshore currency for those looking to arbitrage or hedge their exposure. This analysis gives an indication of the average width of the spread what key levels to look out for.

Quarterly Metals Report – Q4 2021

The global macro picture is starting to present some downside risks in the near term as China's economy is set to slow further and supply-chain bottlenecks continue to cap growth. New orders and new export orders in China are contractionary, and we expect demand in Q4. Order backlogs and lead times for products will continue in Q4, limiting growth, and real consumption is weaker than it looks. Higher costs from shipping, raw materials and energy will take their toll on the consumer, and we expect end-user demand to suffer. The final piece of the jigsaw is the reduction in stimulus from central banks and how that will impact financial markets, bond yields, and the dollar has rallied while stocks corrected, but what will this trend continue?