Daily metals

This Morning Most base metals opened Thursday slightly above Wednesday’s official closes. Nickel was the strongest mover, gaining 0.5%, followed by tin at 0.3% and lead at 0.2%. Copper and zinc each rose 0.1%, while aluminium was the only faller, down 0.1%. The overall tone was positive but restrained after the Federal Reserve raised U.S. interest rates and strengthened the dollar. Macro & Geopolitics The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00% and indicated that another increase may follow this year. Short-term U.S. bond yields and the dollar rose, creating a tougher background for industrial metals. Attention now shifts to the Bank of England, which is expected to hold rates steady, although elevated energy prices could prompt a more forceful warning on inflation. Brent crude eased to about $105 a barrel after Saudi Arabia reportedly offered additional supplies through Oman. Middle East fighting and restricted shipping routes nevertheless remain risks for European fuel, freight and production costs. Base Metals Copper held a small gain as stronger Chinese buying offset pressure from the dollar. Chinese import premiums reached their highest level in nearly four years after lower prices encouraged restocking. Higher Peruvian production provided a modest supply counterweight, with copper output rising 3.7% year on year in July. Nickel led the morning’s gains despite Indonesia reducing the corrective factor used in its official pricing formula for low-grade nickel ore. The change should lower ore prices, taxes and royalties for limonite used in high-pressure acid-leach plants, potentially easing operational pressures for battery-material producers. Aluminium slipped even as Bahrain’s Alba continued to operate below its pre-war production rate. The EU’s withdrawal of a proposed aluminium-scrap export duty has also raised uncertainty over planned European recycling investment. Lead, tin and zinc were modestly firmer. Precious Metals Gold rebounded 0.8% to around $4,295 an ounce after touching a near six-week low on Wednesday. Silver rose 1.2%, platinum 1.7% and palladium 2.2%. Softer oil prices and continued geopolitical tension encouraged buying, but the Fed’s signal of further rate increases may limit the recovery because higher yields make non-interest-bearing precious metals less attractive. Steel European stainless steel producers face continued uncertainty over ferronickel supplies. EU regulators have warned that MMG’s planned purchase of Anglo American’s Brazilian nickel operations could lead to supply being redirected away from Europe. MMG has offered long-term supply commitments to European customers, but the European Commission’s decision remains unresolved. Until the issue is settled, stainless producers and traders may remain cautious about future raw-material availability and costs. Rare Earth Metals The EU plans to create a new European corporation to help secure and stockpile critical raw materials, including rare earths, as it seeks to reduce dependence on China. South Korea is also expanding minerals cooperation with Kazakhstan and four other Central Asian countries through regional rare-metals centres. The plans cover exploration, refining, processing and workforce training. For European recyclers, the policy direction points towards greater attention to domestic recovery, secure sourcing and traceability of strategic materials. Forex The dollar index climbed to a seven-week high near 100.3 following the Fed’s rate increase, while the euro weakened to around $1.146. A stronger dollar can raise the euro cost of LME metals even when dollar prices show little movement, potentially supporting replacement values for European scrap. Sterling may be volatile around Thursday’s Bank of England decision, particularly if policymakers suggest that high energy costs could require another rate increase later this year. Watch Today Final eurozone inflation figures for August are due this morning, followed by the Bank of England’s rate decision at 11:00 GMT. U.S. housing starts, weekly jobless claims and the Philadelphia Fed business survey are due at 12:30 GMT. The BoE’s language on energy-driven inflation and future rate increases is likely to be particularly important for sterling and UK metal buyers.