Daily metals

Base metals are broadly lower in early Wednesday trade as renewed U.S.-Iran hostilities and looming U.S. inflation data weigh on sentiment. Copper trades at $13,480, down 0.7% from Tuesday's official close of $13,573.34. Aluminium is at $3,496, off 1.5% from its $3,547.50 close — the biggest decliner in the complex. Nickel slips 0.7% to $17,700 versus $17,829.71. Lead is flat at $1,970 (-0.3%). Tin drops 1.1% to $51,515 from $52,097. Zinc edges lower to $3,532, down 0.2% from $3,538.86. Macro & Geopolitics The fragile Middle East ceasefire is unravelling after the U.S. launched strikes on Iranian air defence and radar sites near the Strait of Hormuz in retaliation for the downing of a U.S. Apache helicopter. Iran's Revolutionary Guards responded with attacks on a U.S. base in Jordan and 21 other Gulf targets. Brent crude rebounded ~1% to $92 after touching a seven-week low on Tuesday. All eyes are on today's U.S. May CPI release (12:30 GMT), with consensus at 4.2% y/y — the highest since April 2023. CME FedWatch now prices a 70%+ probability of a Fed rate hike by December. China's May PPI surged to a near four-year high of 3.9% y/y, driven by energy costs and AI-related demand. Bank Indonesia delivered a surprise off-cycle 25bp hike to 5.5% on Tuesday, the latest EM central bank forced into tightening by the energy shock. Tomorrow's ECB decision looms large for European markets, with a 25bp hike to 2.25% fully priced despite last week's revised Q1 eurozone GDP contraction of -0.2%. Base Metals Copper is under pressure from the macro headwinds but structural support persists. LME warehouse stocks have fallen every day since May 28, with available inventory at 228,650 tonnes — the lowest since mid-February — as metal continues to flow to the U.S. ahead of the June 30 Commerce Department tariff update. Morgan Stanley estimates U.S. year-to-date "over-importing" at 260,000 tonnes. Aluminium hit a one-month low as China's May exports surged 5.7% m/m to 632,000 tonnes — the highest in a year — filling the gap left by Gulf smelter outages that have cut regional output by 35% y/y. Goldman Sachs flagged that Boliden's Garpenberg mine, Europe's largest zinc mine, could operate at structurally lower output for an extended period following the March seismic event, with 2026 milled volume guidance slashed 59% to 1.5 million tonnes. Trafigura secured a $400 million financing package with Australia's Develop Global for the Sulphur Springs copper-zinc project, with first concentrate expected mid-2028. Precious Metals Gold is in freefall, hitting an 11-week low around $4,181 — down nearly 2% — as the dollar and oil both strengthened on the U.S.-Iran escalation. Bullion has now fallen for four straight sessions and trades well below its 200-day moving average, which it broke on Friday for the first time since October 2023. Tastylive's Ilya Spivak warned that a break below $4,100 could open the path to $3,500 by year-end. Silver plunged nearly 3% to $63.42, platinum dropped 3.4% to $1,668, and palladium fell 1.5% to $1,204. Today's CPI print is the key catalyst — a hot number would cement rate-hike expectations and likely push gold lower still. Steel Ukraine's steel output fell 6.1% y/y in January–May to 2.88 million tonnes, with the sector warning that a proposed 45%+ freight tariff hike by state railway Ukrzaliznytsia could trigger permanent plant closures and 300,000 job losses. In a positive development for European green steel, Salzgitter Flachstahl and EWE Hydrogen signed a binding contract for the long-term supply of 10,000 tonnes of green hydrogen per year, advancing the SALCOS low-carbon steelmaking programme. India's CMR Green Technologies, the country's largest aluminium recycler, debuted with a 40% listing pop — a signal of investor appetite for the circular metals economy. Rare Earth Metals Japan and Malaysia are deepening cooperation on critical mineral supply chains, with the two countries agreeing to work together on economic security with China's rare earth export restrictions in mind. Malaysian PM Anwar Ibrahim and Japanese PM Takaichi also signed a 20-year LNG deal for 2 million tonnes per annum starting 2028, underscoring Tokyo's urgency to diversify energy and mineral sources away from conflict-exposed routes. Forex The euro is pinned near $1.1537, hovering just above its nine-week low of $1.15, as the single currency is caught between a fully priced ECB hike tomorrow and the revised Q1 eurozone GDP contraction of -0.2% — the first since late 2022. Eurozone inflation at 3.2% in May leaves the ECB little choice but to tighten, yet the stagflationary backdrop limits upside for the euro. Sterling trades around $1.337. The dollar index holds firm near 100, underpinned by rate-hike expectations. USD/JPY remains above 160, with Japanese wholesale inflation accelerating to a three-year high in May, adding to the case for a BOJ hike on June 16. Watch Today U.S. May CPI at 12:30 GMT is the day's main event — consensus expects 4.2% y/y headline, with core at 2.8–2.9%. A hot print would reinforce Fed hike bets and pressure metals further. The U.S. Treasury auctions $39 billion in 10-year notes. Canada's central bank announces its rate decision. Tomorrow brings the ECB rate decision, U.S. PPI, and the start of the FOMC blackout period ahead of the June 17 meeting.