Daily metals

Base metals open Wednesday on the defensive against Tuesday's official LME closes, with quarter-end profit-taking extending into Q3. Copper is the biggest laggard, trading 13,256.5 versus Tuesday's 13,348.9 close (-0.7%), while zinc slips to 3,528 (-0.7%) and aluminium eases to 3,064 (-0.2%), touching a fresh four-month low intraday. Nickel bucks the trend at 16,245 (+1.0% vs 16,088.41), extending Tuesday's recovery. Lead firms marginally to 1,845 (+0.4%) and tin holds steady at 51,100 (-0.1%). The complex is digesting broken U.S.–Iran talks in Doha and a fresh spike in U.S. Treasury yields. Macro & Geopolitics The new quarter opens with risk sentiment on the back foot as Iran refused to meet U.S. envoys Kushner and Witkoff in Doha, leaving the Strait of Hormuz question unresolved and the ceasefire fragile. U.S. 10-year yields jumped nearly 9bp to 4.55% overnight, with futures now implying a 33% chance of a July Fed hike and 67–88% for September after hawkish Hammack remarks. Fed Chair Warsh headlines the Sintra panel today alongside Lagarde, Bailey and Macklem — traders expect little forward guidance. Euro zone flash HICP is forecast to dip to 3.0%, likely cementing the market's view that ECB tightening is nearly done at 2.5%. President Trump is also expected to formally decline to extend the USMCA today, starting a six-year wind-down clock on the North American trade zone. Base Metals Aluminium set the tone, extending losses to a four-month low of $3,060 in Asian hours as Gulf risk premia continue to unwind despite the Doha stalemate. StoneX estimates up to 3Mt of smelter capacity was idled during the Iran war and still projects a 1Mt market deficit this year, suggesting downside from here is limited. The bigger structural story broke overnight: South32 agreed to sell most of its aluminium value chain — Worsley, Hillside, MRN, Brazil Alumina and Aluminium — to Alcoa for up to $5.6bn enterprise value, consolidating Western upstream capacity and freeing South32 to pivot to copper via Sierra Gorda's fourth grinding line expansion. Copper drifted lower on quiet Asian flows; support comes from China's RatingDog June manufacturing PMI at 51.7 (Q2 the strongest since Q4 2020) and Rio Tinto's confirmation that Oyu Tolgoi remains on track for ~500ktpa from 2028. Vedanta's decision to postpone the CopperTech IPO amid "volatility across the global copper equity sector" underlines nervy positioning ahead of the U.S. Section 232 verdict. Zinc gave back some of the quarter's 10% gain but the forward curve remains the only LME contract in backwardation. Nickel, lead and tin remain range-bound. Precious Metals Gold extended Tuesday's slide, touching $3,942.99 in the previous session — its lowest since November — before edging back near $3,975 in Asian trade. Q2 marked bullion's worst quarterly performance since 2013 (-14%) and June the worst month since October 2008. Higher Treasury yields, a firmer dollar and Hammack's hawkish tone are overriding the fading Middle East risk premium. Silver traded near $57.60/oz and platinum slid to $1,540, its lowest since November. An OMFIF survey confirms central banks plan to keep adding gold near-term even as they cut dollar allocations over the next decade — a structural tailwind that is being drowned out by the cyclical rates story. Steel The EU's new steel safeguard regime takes effect today: tariff-free import quotas are cut 47% to 18.3Mt annually and out-of-quota duty rises to 50% from 25%. The Commission has reserved half the quotas for FTA partners, with country-specific allocations proportionate to historic volumes softening the blow for most. Eurofer estimates the measures could lift EU capacity utilisation to 73–75% from ~67%, clawing back around 15Mt of production — roughly half of what has been lost in recent years. Director general Axel Eggert flagged that downstream sectors (laminators, auto stampers) may need parallel protection to sustain the effect. UK mirrors the framework from today. Rare Earth Metals A CSIS one-year review of China's rare-earth export controls confirms European imports have rebounded strongly — magnet shipments to Europe jumped 60% year-on-year in November 2025 as Beijing eased the October measures — while U.S. flows have not recovered to 2024 levels. That divergence gives EU manufacturers a relative breathing space, but the April 2025 controls on seven REEs and the dual-use licensing system remain in force, keeping heavy rare-earth compounds (dysprosium, terbium, yttrium, lutetium) tight. Project Blue expects ex-China HREE bottlenecks to persist through 2026–27, and new non-Chinese magnet capacity is only starting to come online this summer. The Sefcovic–Wang joint monitoring mechanism agreed Monday is the near-term insurance policy. Forex The euro is treading water at $1.1409, just above its 13-month low of $1.1325, as the dollar index heads into Q3 riding a four-quarter winning streak. The Fed–ECB policy divergence remains the dominant driver: markets pricing at least one further Fed hike versus a July ECB move now seen at only 32% probability, with terminal deposit rate likely capped at 2.5%. Euro-zone flash CPI at 3.0% would reinforce that pause. The yen slid to a fresh 40-year low at 162.84 with no intervention yet — Deutsche Bank's fair-value model sits in the low 150s, suggesting Tokyo may sit tight. For European scrap desks, sustained euro weakness continues to lift the euro-denominated value of dollar-priced LME contracts. Watch Today Euro-zone flash HICP for June (0900 CET) and final manufacturing PMIs headline the European morning. In the afternoon, U.S. ISM manufacturing, ADP employment and construction spending precede Thursday's non-farm payrolls. Warsh, Lagarde, Bailey and Macklem share a Sintra panel — any deviation from Warsh's "no forward guidance" line will move the dollar and LME base complex immediately.