Daily Metals

This Morning Base metals opened Friday under pressure, with all six below Thursday’s official close. Tin led the decline, falling 1.4%, while aluminium was down 0.7%. Lead and zinc each lost 0.6%, copper slipped 0.5% and nickel eased 0.2%. The broad retreat suggests that the stronger dollar and weaker risk appetite are outweighing concerns about tight physical supply. Macro & Geopolitics Markets remain unsettled by the leadership crisis at Nvidia and questions about whether investment in artificial-intelligence infrastructure could slow. This matters for metals because data centres are expected to become an important source of copper demand. US bond yields and the dollar have also climbed as traders consider whether the Federal Reserve could raise rates by half a percentage point in December, although a quarter-point move remains the main expectation. Oil is heading for a second weekly decline as the continued US blockade of Iran reduces the immediate risk of renewed large-scale fighting, but attacks on shipping continue to threaten supply routes. Base Metals Copper’s attempted recovery after Thursday’s four-month low has faded, leaving the metal 0.5% below Thursday’s official close. Worries about weaker AI and data-centre investment are adding to pressure from the strong dollar, although Chinese import conditions remain tight, with the Yangshan copper premium reaching a record $240 a tonne. Aluminium is down despite an acute shortage of immediately available metal: the LME cash premium over the three-month contract recently reached a 36-year high, while exchange stocks have fallen sharply. Tin is the weakest metal this morning, while zinc, lead and nickel are also lower as traders reduce risk ahead of US inflation data. Precious Metals Gold rebounded by around 1% to roughly $3,919 an ounce as bargain buyers returned after Thursday’s fall to its lowest level in more than a year. It nevertheless remains down about 3.6% this week as rising US yields and the strong dollar reduce its appeal. Silver recovered to around $50.27, platinum rose above $1,530 and palladium moved back above $1,010, although silver and palladium were still heading for weekly losses. Steel High electricity costs and weakening vehicle demand remain major problems for Europe’s steel and automotive sectors. Salzgitter warned that current European power prices are not sustainable for energy-intensive industry and called for stronger action from Berlin and Brussels. Mercedes-Benz has meanwhile halted further investment at its German locations and is examining possible plant closures after failing to agree on labour-cost savings. Any reduction in car production could weaken demand for flat steel and limit the flow and consumption of automotive scrap, particularly in Germany. Forex The dollar remains close to a 19-month high as stronger US inflation and rising Treasury yields support expectations of further Federal Reserve tightening. The euro ended Thursday near $1.105, leaving European metal buyers exposed to higher local-currency costs even where dollar prices are falling. The yen has also weakened towards 160 per dollar, increasing the chance of intervention by Japanese authorities. For European scrap traders, continued euro weakness could keep imported metal, fuel and freight expensive and prevent lower exchange prices from fully reaching domestic buyers. Watch Today France’s final October inflation figures and the eurozone’s first estimate of third-quarter GDP are due this morning and may move the euro. US producer-price inflation follows at 13:30 GMT, with several Federal Reserve officials also scheduled to speak. A stronger inflation reading could lift the dollar and add further pressure to metals.