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Daily Base Metals Report

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Stock markets across the world started the week on the back foot, with the S&P 500 falling to the lowest level since March last year, amid building concerns about the Fed’s ability to temper inflation without causing a recession. The dollar jumped above 104 in the first half of the day, superseding 2002 highs, whilst the 10yr US Treasury yield jumped to 3.20%. US consumer price inflation is out this Wednesday and is forecast to have slowed in momentum in April, growing by 8.1% y/y, vs 8.5%% in March. Meanwhile, more than two months following the escalation of the Ukrainian crisis and subsequent sanctions imposed on Russia, markets are now forecasting Russian GDP to fall as much as 12% in 2022, the deepest decline since the early 1990s.

LME metals’ group followed the general market sentiment today, with metals selling off across the board. The momentum was further amplified by the growing demand concerns coming from China. Indeed, Chinese exports and imports weakened in April, with the former growing at the slowest pace since June 2020; the data highlights the struggle the supply chains faced due to covid restrictions, with ships still struggling to dock and unload at Shanghai ports. The central bank once again reiterated its pledge to support the economy and boost market confidence while signalling a relaxation of property controls, passing the reigns of control to local governments instead. Nickel saw the strongest losses, falling by more than 6% to close at $28,185/t, the same level the metal traded at before the short squeeze in March. Next in line was tin, also down by more than 6%, falling to close at $37,119/t. Aluminium fell below the support levels of $2,800/t to close at December 2021 levels of $2,755/t. Likewise, copper weakened but found support at $9,139/t and has since continued to trade higher to close at $9,237.50/t.

Oil futures sold off on the back of multiple bearish factors, including the news that the EU plans to drop the Russian takers from moving to other customers. WTI and Brent remained elevated above $100/bl at $103.46/bl and $106.28/bl, respectively. Precious metals were mixed, with gold and silver on the back foot; the latter saw more significant declines, falling to $21.85/oz; gold traded at $1,860/oz.

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

All price data is from 09.05.2022 as of 17:30


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