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Daily Base Metals Report

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US stocks fell today as markets worried about the prospects of another aggressive rate hike from the Fed in September, as the minutes are coming out later today. Retail sales stagnated in July, with declines in auto purchases and lower petrol prices driving the deceleration, as the index was flat month-on-month; other categories remained resilient, growing by 0.7% when excluding the above-mentioned sectors. The dollar remained broadly unchanged, and the 10yr US Treasury yield strengthened to 2.88% ahead of the Fed’s minutes. In Asia, stocks rose on speculation that China might release more stimulus to support the economy. Elsewhere, the EU economic GPD growth was revived downward as more signs point to a continued slowdown.

Growing downward sentiment prevailed on the LME exchange today, only with aluminium to strengthen into $2,429.50/t. Norsk Hydro stated that it is planning to shutter an aluminium smelter in Slovakia as the energy crisis continues to climb. The region had already lost about half of its zinc and aluminium smelting capacity over the past year, but the recent move is planning to shut down the facility entirely. Zinc, on the other hand, sold off, falling below the support level of $3,550/t to $3,540/t. Lead was next in line as it declined slightly into $2,131.50/t. Copper and nickel remained broadly unchanged at $7,953/t and $22,200/t, respectively. China is cutting down power in factories in the southwest as the cities imposed a rolling blackout after the hydropower reservoirs ran low, further adding to existing capacity strains.

Oil futures fluctuated between gains and losses, with WTI and Brent trading at $88/bl and $93/bl. Precious metals weakened slightly, with gold and silver edging lower to $1,768/oz and $19.86/oz, respectively.

All price data is from 17.08.2022 as of 17:30

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