Metals Daily

This Morning The LME complex is largely flat to softer this Thursday morning, consolidating after Wednesday's sharp rally on US-Iran peace deal hopes. Copper is trading at $13,305 cash / $13,372 three-month, slipping 0.1% from Wednesday's official close. Aluminium is the weakest performer, down 0.7% to $3,498 on three-month, as the prospect of easing Middle East supply disruptions weighs on the metal — the region accounts for roughly 9% of global primary output. Tin has given back the most in absolute terms, shedding 0.7% to $53,322 cash after surging nearly 9% in the prior session. Nickel is down 0.1% to $18,971 cash. Lead and zinc are marginally firmer, up 0.1% and 0.3% respectively, bucking the softer tone. Macro & Geopolitics Markets are digesting Wednesday's euphoric session, when reports that Washington and Tehran are closing in on a one-page memorandum to end the Gulf war sent Brent crude tumbling nearly 8% to briefly touch $100/bbl and propelled the S&P 500 and STOXX 600 to fresh records. Iran says it is reviewing the proposal but the Strait of Hormuz — through which 20% of global energy flows — remains effectively closed, and key US demands including nuclear suspension are unresolved. Fed officials warned the war is raising the risk of a sustained inflation shock. G7 trade ministers meeting in Paris sought common ground on critical minerals but fresh US threats to raise tariffs on EU cars to 25% strained unity, with Germany's automotive sector under particular pressure. US Treasury Secretary Bessent heads to Japan next week to discuss the weak yen, rare earths and energy security. Base Metals Copper's pullback from Wednesday's near two-week high of $13,462 reflects what KCM Trade's Tim Waterer called a "momentum pause" — healthy consolidation as traders recalibrate for a world where Hormuz may reopen. Chinese markets returned from the May Day break on Wednesday, with SHFE copper climbing 1.6% and services PMI data showing faster expansion in April, providing a demand-side tailwind. Tin remains the standout story: physical tin traded on the Jakarta Futures Exchange collapsed 83% month-on-month, reflecting Indonesia's tightened RKAB licensing regime — a structural supply squeeze that sent LME tin to a two-month high on Wednesday. Aluminium faces a unique headwind from potential peace: Gulf smelters account for significant global capacity, and easing energy disruptions could relieve supply tightness. Guinea's EGA-government bauxite settlement should help stabilise aluminium feedstock flows, while a pay dispute has halted mining at Baowu's Simandou blocks since April 28, with over 3,000 workers on strike. Precious Metals Gold is holding near $4,700, up 0.3% in early Asian trade after surging 3% on Wednesday to its highest since April 27. The peace deal prospect dragged the dollar lower and eased inflation expectations, creating a supportive backdrop for bullion. Marex analyst Edward Meir sees gold rangebound between $4,600 and $5,100 near-term, noting the market "overreacted" to a deal still in progress. Silver jumped 6% on Wednesday to $77.16 and platinum rose over 4% to above $2,044. Perth Mint reported April gold product sales up 6% month-on-month, while silver sales halved to an eight-month low. Steel The Baltic dry freight index hit a two-year high on Wednesday, with capesize rates surging 7.9% as tightening tonnage and firming cargo demand supported the market. Trump's threatened 25% auto tariff on European vehicles adds cost pressure across the steel-consuming automotive chain. UK construction activity shrank at the strongest pace in almost six years in the three months to March, with the RICS survey showing the war in Iran has increased firms' costs and weighed on sentiment. Rare Earth Metals G7 trade ministers in Paris pledged to ensure that "attempts to weaponise economic dependencies will fail," with France pushing critical minerals as a key deliverable ahead of the June leaders' summit. Midwest Ltd has been selected as lead consortium partner for a strategic rare earth elements pilot project. US Treasury Secretary Bessent's Japan agenda next week will include rare earths and energy procurement alongside currency discussions. Forex The euro held at $1.1747 after gaining around 0.5% on Wednesday as the dollar weakened on peace deal optimism. The dollar index slipped to 98.03, its lowest in over a week, as safe-haven demand faded. Sterling firmed to $1.3591 ahead of UK local elections today. The yen remains the most volatile major currency — it spiked to 155 per dollar on Wednesday in a sudden move that fuelled fresh intervention speculation, before settling around 156.3. Japan's top currency diplomat confirmed Tokyo faces "no constraints" on intervention frequency and is in daily contact with US authorities. Watch Today ECB Vice President de Guindos and board members Schnabel and Lane are all scheduled to speak — any hawkish signals could move European rate expectations. Germany's March industrial orders and manufacturing output data land at 08:00 CET. UK local elections may have implications for gilt markets if Labour performs poorly. Norway and Sweden both announce interest rate decisions. US weekly jobless claims and Q1 productivity data are due in the afternoon, ahead of Friday's critical non-farm payrolls report.