Daily metals

This Morning Base metals are mostly positive early on Wednesday compared with Tuesday’s official closes. Nickel leads with a gain of about 1.1%, while lead, zinc and aluminium are each up roughly 0.4%. Tin is virtually unchanged, while copper is fractionally lower. The mixed picture suggests cautious buying ahead of the Federal Reserve’s decision rather than a broad market move. Macro & Geopolitics Markets are calmer this morning, but the main risks remain. The U.S. 10-year Treasury yield has slipped just below 5% after crossing that level on Tuesday, while traders see a 92.4% chance of a 25-basis-point Federal Reserve rate increase later today. Brent crude has eased to around $108 a barrel after an unexpected rise in U.S. crude inventories. However, the suspension of Saudi oil loadings at Yanbu and continuing Middle East attacks keep energy-supply risks elevated. For European recyclers and manufacturers, expensive fuel and borrowing remain threats to margins, transport costs and demand. Base Metals Copper’s earlier rebound has faded, with rising exchange stocks limiting support from improved Chinese buying. The Yangshan copper premium reached $110 a tonne, but LME stocks climbed to 249,225 tonnes and U.S. COMEX inventories also increased. Record first-half copper exports from the Democratic Republic of Congo add to signs of greater available supply. Aluminium is firmer, although record Chinese production in August could restrict further gains. Nickel is the strongest metal this morning, while lead and zinc have advanced more moderately. Tin is steady as traders await clearer direction from interest rates and the dollar. Precious Metals Gold rose 0.8% to around $4,328 an ounce this morning as lower oil prices offered some relief and geopolitical risk continued to attract buyers. Silver gained 1.5% to $64.60, platinum added 0.7% to $1,788 and palladium climbed 1.6% to nearly $1,310. Attention now turns to the Federal Reserve’s message. A firm warning about further rate increases could pressure precious metals, while a softer outlook may extend the recovery. Steel Nippon Steel and the Slovak government have signed agreements supporting a new electric arc furnace and air-separation equipment at the Košice steelworks. The modernisation project is valued at about €900 million, with public funding of up to €350 million. Because electric arc furnaces use more recycled material than traditional blast furnaces, the investment could support longer-term European ferrous-scrap demand, although it is not expected to alter near-term scrap flows. Forex The dollar remains near a two-week high, with the dollar index around 99.7, while the euro is close to $1.154. Expectations of a U.S. rate rise are supporting the American currency despite a small retreat in Treasury yields this morning. A weaker euro increases the euro-denominated value of LME metals and raises costs for dollar-priced energy and shipping. Sterling could be volatile as UK inflation figures arrive ahead of Thursday’s Bank of England decision. Watch Today UK CPI, RPI and PPI figures, along with eurozone industrial production and labour-cost data, are due during the European session. U.S. retail-sales data and the Federal Reserve’s policy decision are scheduled for 12:30 GMT, followed by Chair Kevin Warsh’s press conference.