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Daily Base Metals Report

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The US stocks declined as inflation quickened in Europe. Euro-zone CPI accelerated to an all-time high in May, as it grew 8.1% y/y, with both German and French inflation figures at record highs of 7.9% and 5.2%; the growth continued to be driven by food and energy costs, but core also accelerated by 3.8%. This figure is still unlikely to bring a 50bps hike by the ECB like we have seen from the Fed, as it tries to calm markets ahead of its first move in July. US Treasury yields climbed on the renewed worries over inflation, pushing the 10yr yield back to 2.84%. The dollar jumped back to test 102. Elsewhere, China's manufacturing PMI improved month-on-month to 49.6 in May, still contractionary but higher than 47.4 during the previous month, citing recovering supply and demand as the main reason behind the improvement.

Mostly downward sentiment on the LME market today, only with tin closing higher at $34,670/t. Aluminium saw the strongest losses, falling by more than 3% back to the mid-May level, erasing weeks' worth of gains; the metal closed below $2,800/t at $2,787/t. Nickel followed suit, falling for the first time in four trading sessions down to $28,3925/t, in line with Friday's close. Copper fluctuated in the first half of the day before selling off below $9,500/t to $9,447.50/t. Lead and zinc closed lower at $2,182/t and $3,913.50/t, respectively. Some supply chain concerns are easing in the US, as the average transpacific shipping journey has fallen to the lowest level since November, according to Flexport data. Delays in relation to the container move out of rail depots in cities such as Detroit and Memphis have also decreased to the slowest level since September. However, on the other side of the equation, companies such as Target recently mentioning the problem of the diminishing demand for goods in the US, with bulky items such as TVs and fridges sitting in warehouses untouched.

Oil futures headed for a 2-month, following the news that Europe will ban most of the Russian oil, with Hungary the only country as an exemption. WTI and Brent jumped to $117/bl and $123/bl. Another day of mixed precious metals' performance today, with gold and silver edging lower to $1,841/oz and $21.72/oz, respectively.

For more in-depth analysis of base and precious metals, our Q2 2022 Quarterly Metals report is out now!

All price data is from 31.05.2022 as of 17:30


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