Daily Metals

THIS MORNING Base metals were lower across the board early Tuesday compared with Monday’s official close. Tin led the decline, falling 3.6%, followed by copper at 2.3% and zinc at 2.2%. Aluminium dropped 1.8%, nickel lost 0.7% and lead was the most resilient, down 0.2%. The broad retreat pointed to cautious buying at the start of the European business day. MACRO & GEOPOLITICS Risk appetite weakened before Tuesday’s US midterm elections, with Asian technology shares falling sharply and European stock futures pointing lower. Oil steadied above $105 a barrel after losing more than 7% on Monday, while a US official confirmed that the United States had struck Iran’s Qeshm Island, renewing concern about possible supply disruptions. US manufacturing activity grew faster in October, but factories continued to report elevated costs for energy, copper and aluminium. Traders increased their expectations of another Federal Reserve rate increase in December. Australia’s central bank raised its main rate to 4.85%, although its guidance suggested that further increases were not certain. BASE METALS Copper reached a seven-week low as traders reduced risk before the US vote and the dollar strengthened against China’s yuan. A weaker yuan raises the cost of dollar-priced metal for Chinese buyers. Tin suffered the largest fall, while zinc and aluminium also came under heavy selling pressure. Physical copper conditions nevertheless remained tight: China’s import premium was close to $200 a tonne and exchange-monitored stocks were more than 75% below their level six months earlier. Copper concentrate supplies also remained strained, although increasingly complex contracts made headline processing charges less useful as a measure of the shortage. PRECIOUS METALS Gold fell around 0.9% to roughly $3,914 an ounce, giving back part of Monday’s strong rebound. Oil’s recovery revived inflation and interest-rate concerns, while election uncertainty encouraged investors to reduce exposure. Silver dropped about 3%, platinum lost 1.3% and palladium fell about 2.3%. Gold remained supported by central-bank purchases and inflows into gold-backed exchange-traded funds, but weaker demand for bars, coins and jewellery was limiting the market’s recovery. STEEL Strikes gathered pace across Germany’s metal and electrical industries, affecting workers at Audi, Mercedes-Benz and Tata Steel. The IG Metall union is seeking a 5% pay rise and stronger protection for jobs and production sites. Wider or longer stoppages could disrupt steel operations, manufacturing schedules and nearby scrap flows. Separately, an explosion at an iron-smelting plant in Cameroon killed four people and severely burned 16 others. The operator had not established the cause of the incident. RARE EARTH METALS The United States is seeking to link peace efforts in Myanmar with possible access to the country’s rare-earth deposits. Much of Myanmar’s rare-earth output is shipped to China, while important deposits are located in conflict-affected regions. The strategy identifies potential opportunities for US commercial involvement, but continuing conflict, sanctions and uncertainty over the operating environment mean any meaningful change to global supply is likely to take time. FOREX The euro entered Tuesday near $1.12 after strengthening on Monday, but renewed caution in global markets could limit further gains. The dollar index held near 101.8, while the dollar rose about 0.4% against the Chinese yuan. Yuan weakness contributed to pressure on copper and other metals by making imports more expensive in China. The Australian dollar slipped below $0.70 even after Australia raised interest rates, as the central bank gave a less aggressive signal about future increases. A firmer euro would reduce dollar-based metal costs for European buyers. WATCH TODAY Voting in the US midterm elections is the main event and could shift expectations for government spending, trade policy and possible copper tariffs. US factory-order figures are also due. Results from AMD and Shopify may influence technology shares and confidence in metal-intensive data-centre investment.