Metals Daily

This Morning LME base metals open the week with a broadly firmer tone following Friday's close. Nickel is the standout, trading at $19,245 on the three-month contract, up 1.2% from Friday's close of $19,015, as Indonesian supply curbs and sulphur shortages bite. Aluminium is 0.6% firmer at $3,614, zinc edges up 0.2% to $3,479, and copper adds 0.2% to $13,334. Lead and tin are essentially flat, with lead at $1,963 and tin at $50,300. The complex is underpinned by stalled U.S.-Iran peace talks keeping the Strait of Hormuz effectively shut, while AI-driven risk appetite in equities provides a supportive backdrop. Macro & Geopolitics The week ahead is dominated by central bank decisions — the Bank of Japan on Tuesday, the Fed on Wednesday (likely Powell's final meeting as chair), and the ECB and Bank of England on Thursday — all expected to hold rates steady. Stalled U.S.-Iran diplomacy remains the overarching macro risk: Trump cancelled envoy visits to Islamabad over the weekend, though an Axios report that Tehran has proposed reopening the Strait of Hormuz separately from nuclear talks offered a glimmer of hope. Brent crude surged above $107 in early Asian trade, stoking inflation fears that have all but eliminated rate-cut expectations for 2026. Citi warned Brent could hit $150 if Hormuz disruption persists through June, raising its base-case forecast for Brent to $110, $95 and $80 a barrel for the second, third and fourth quarters of 2026, respectively. In Mali, coordinated al-Qaeda and Tuareg rebel attacks — the largest in years — killed Defence Minister Sadio Camara and disrupted the gold-producing nation, adding a further layer of geopolitical unease. Base Metals Nickel leads the complex, with SHFE nickel surging over 3% to its highest since late January. The rally has shifted from narrative to reality: Eramet confirmed it will halt production at its Indonesian Weda Bay nickel mine from mid-May after exhausting its 12-million-wet-ton ore quota, while Indonesia's 2026 mining quota was approved at significantly lower levels than 2025. Sulphur shortages stemming from the Hormuz closure are compounding the squeeze on nickel processors — the Middle East accounted for roughly half of global seaborne sulphur supply pre-war. Copper remains range-bound, caught between supportive macro sentiment and ample LME warehouse stocks. Aluminium firmed modestly. Precious Metals Gold recovered early Monday losses to trade around $4,727, supported by a softer dollar after reports of Iran's new peace proposal. The metal fell 2.5% last week, snapping a four-week winning streak, as rising oil-driven inflation expectations bolstered the case for higher-for-longer rates. SPDR Gold Trust holdings slipped 0.2% to 966.3 tonnes on Thursday. All eyes are on Wednesday's Fed decision — any signal that policy will remain unchanged through year-end due to the energy crisis could provide a floor for bullion. Physical demand remains firm, with Indian gold premiums at 2½-month highs. Steel Limited fresh steel-specific developments over the weekend. NI Steel reported Q1 operating profit of 6.2 billion won, down 6.7% year-on-year, reflecting margin pressure from elevated energy costs. China's CMRG is reportedly close to an iron ore supply deal with Fortescue, following a similar agreement with BHP, signalling Beijing's continued push to diversify procurement channels. Arabian Steel Pipes posted Q1 profits of 534,023 dinars on sales of 3.1 million dinars. European steelmakers face a challenging week with energy input costs elevated by the Hormuz disruption. Rare Earth Metals No material rare earth developments since the cutoff date. The market continues to digest China's earlier export restrictions on dual-use items to Japanese entities. Pricing remains sensitive to any concrete implementation steps on tariffs or stockpile purchases, but without fresh policy signals, rare earths are trading more on China's supply discipline and downstream magnet demand. Forex The dollar index edged higher in early Monday trade. The euro sits at $1.1724, down modestly. Dollar strength is being driven by oil-fuelled inflation expectations reducing the probability of Fed rate cuts. Sterling faces a volatile week with the Bank of England decision on Thursday. The yen weakened to 159.53 per dollar as the BOJ is expected to hold at 0.75% on Tuesday. Watch Today German GfK consumer sentiment for May is due this morning and will offer an early read on how Europe's largest economy is absorbing the energy price shock. Deutsche Börse reports earnings. Traders should position for a data-heavy week: U.S. Q1 GDP preliminary reading, core PCE, eurozone flash CPI, and the parade of central bank decisions from Wednesday through Thursday will set the tone for May.