Daily Metals

THIS MORNING Early Wednesday trading was mixed rather than broadly directional. Tin showed the largest decline, down about 0.5% from Tuesday’s official close, while copper eased about 0.3% and aluminium was virtually unchanged. Lead and zinc each gained about 0.4%, with nickel up about 0.3%. The firmer performance in three metals suggests selective buying, although caution around copper and tin remains evident at the start of the European business day. MACRO & GEOPOLITICS A decisive Democratic victory in both houses of the US Congress triggered a move away from riskier assets. Markets fear tighter oversight of technology companies and more restrictions on data-centre construction, potentially slowing a major source of metals demand. European share futures fell about 1.4%, while US government bonds rallied and the dollar weakened as investors expected political gridlock to limit spending. The US-Iran conflict remains another source of uncertainty: oil prices were volatile as traders weighed peace efforts against the risk of renewed attacks. High energy costs therefore remain a concern for European manufacturers and recyclers. BASE METALS Copper remained close to an 11-week low, pressured by weaker technology shares and concern that new US rules could delay data-centre investment. These projects use large amounts of copper in power cables, cooling systems and grid connections. Physical conditions remain supportive, however: China’s copper import premium held near $200 a tonne, while large US inflows linked to possible tariffs have reduced availability elsewhere. Marubeni also expects longer-term copper demand from AI and data centres to remain firm. This morning’s gains in lead, zinc and nickel contrasted with copper’s decline, while tin continued to underperform and aluminium held close to Tuesday’s close. PRECIOUS METALS Precious metals rebounded strongly as the dollar and US bond yields fell after the election result. Gold moved above $4,000 an ounce, rising nearly 2% to about $4,004.27, while silver gained more than 3% to around $51.38. Platinum climbed 3% to roughly $1,465 and palladium added almost 3% to about $959. Expectations of another Federal Reserve rate increase in December remain a headwind, but political uncertainty and demand for protection supported buying. STEEL Steel-sector news offered mixed signals for scrap demand. Ternium reported an 8% year-on-year increase in third-quarter steel shipments and an 87% rise in adjusted EBITDA, reflecting stronger volumes and margins. South Korea’s SeAH Steel also swung back to an operating profit. In contrast, Gerdau is closing steel production at its Divinopolis plant in Brazil because of high input costs, rising imports and weak export conditions. The results point to improving profitability at some efficient mills, alongside continued pressure on less competitive capacity. RARE EARTH METALS A Chinese company announced a strategic partnership to develop a newly discovered rare-earth mine in northeast China. No estimate of the deposit’s size, development cost or production timetable was provided, so it is too early to judge the effect on supply. In the United States, support for building critical-mineral supply chains outside China is expected to remain broadly bipartisan despite the election result. However, the new Congress could examine funding awarded to companies with political connections, potentially slowing some projects. FOREX The euro rose about 0.5% to $1.1249 as the US election result pushed the dollar lower. The dollar index slipped to around 101.34, while sterling strengthened to roughly $1.3464. Safe-haven demand also lifted the Japanese yen and Swiss franc. For European scrap and metal buyers, a stronger euro reduces the local-currency cost of dollar-priced commodities and may soften the effect of high international prices. However, rapid currency moves can also make merchants more cautious when setting short-term offers. WATCH TODAY Eurozone inflation figures and US economic data, including the ISM services survey and September trade figures, are due. Sweden’s Riksbank will announce its interest-rate decision, while European Central Bank chief economist Philip Lane is scheduled to speak. The US Treasury’s borrowing announcement will also be watched closely by bond and currency markets.