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Daily Base Metals Report

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Yesterday’s rebound on the US stock exchanges was short-lived, and the markets continued to break lower today ahead of the Fed meeting this week. US consumer confidence dropped for the first time in four months in January, as sentiment surrounding labour conditions and the overall state of the economy soured. Geopolitical tensions in Ukraine continued to intensify, creating volatility in global markets. Meanwhile, the IMF cut the 2022 growth forecast from 4.9% to 4.4%, with the prospects of weaker growth coming from the US and China as well as persistent inflation driving the downgrade.

Activity on the LME was mixed today, with tin, zinc, lead and nickel weakening but aluminium and copper firmed. Nickel on SHFE was limited down overnight, closing at $22,340/t; the cash to 3-month is still in a steep backwardation at $264/t. Copper was bid across CMX, LME, and SHFE today, with the market holding above the moving averages, closing at $9,801/t. Aluminium was bid, trading up to $3,100/t but failed at this level; the metal closed at $3,092/t. Lead and zinc softened, closing at $2,334.50/t and $3,572.50/t, respectively.

European natural gas prices fluctuated as markets weighed on the impacts of rising shipments from Russia and the tensions in Ukraine. Oil futures recovered some of the losses today as markets shifted their focus back to the demand outlook. WTI and Brent traded at $84.63/bl and $87.47/bl. Precious metals were mixed, with gold finding support at $1,845/oz, while silver softened into $23.78/oz.

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

All price data is from 25.01.2022 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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