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Daily Base Metals Report

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Another risk-off day on the US stock markets as investors awaited the Fed's decision on the speed tapering of bond purchases. In an effort to battle persistent inflation, the Fed stated it would finish the pullback of support also projected three hikes coming next year, up from previously-forecasted two. US retail sales came in softer than expected at 0.3% m/m in November; year on year, however, the index jumped by 19.5%, the strongest since July this year. The dollar gained marginally, and the 10yr US Treasury yields remained broadly unchanged. Elsewhere, Chinese data pointed to another month of slowing growth in November, with retail sales growing by 3.5% y/y and industrial output up by 3.8% y/y. UK inflation topped 5.0% in November, the highest in more than a decade.

Weakness intensified on the LME market yesterday, with subdued economic data from China driving the softness. The Chinese economy slowed in November, led, in part, by a deterioration seen in the property market. Copper was the strongest mover, falling as much as 3,.25%, as a result, down to $9,150/t, levels not seen since the beginning of October; the metal closed at $9,199.50/t; the spread flipped back into backwardation at $14.50/t. Likewise, nickel fell to $19,110/t level on the news that stainless steel mills are planning to cut production, closing marginally higher at $19,116/t. Aluminium continues to fluctuate around the $2,600/t level, closing lower $2,597/t. Only lead managed to come out positive during the day, closing at $2,284/t.

Oil futures slid after US crude stockpiles pointed to the fifth consecutive rise. WTI and Brent fell down to $69.80/bl and $72.91/bl. Precious metals saw broad softness, with gold and silver edging down to $1,767.33/oz and $21.58/oz, respectively.

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

All price data is from 15.12.2021 as of 17:30


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