Metals Daily

This Morning Copper three-month is trading at $13,664 as of Tuesday morning, essentially flat against Monday's close of $13,668. Tin is the standout performer, surging 2.0% to $55,320 — extending its recent rally on persistent supply tightness. Zinc has firmed 1.1% to $3,576 and aluminium is up 0.4% at $3,664. Lead is marginally higher at $2,015 (+0.2%). Nickel is the clear laggard, dropping 1.2% to $18,675 as Nornickel's decision to skip dividends for a fourth year underscores the sector's ongoing challenges. Macro & Geopolitics U.S. strikes on targets in southern Iran overnight — including boats laying mines and missile sites — have dampened hopes of a swift peace deal, even as Tehran's top negotiator and foreign minister were in Doha for talks. U.S. Secretary of State Rubio said a deal could "take a few days," quashing expectations of an imminent breakthrough. Brent crude jumped above $98 in Asian trade, reigniting inflation fears. The Nikkei reported that the U.S. and Iran are discussing reopening the Strait of Hormuz roughly 30 days after any deal. Markets now price a 56% chance of a Fed rate hike by December, while the ECB and Bank of England are also seen tightening. U.S. consumer sentiment hit a record low in May, with long-run inflation expectations climbing to 3.9%. The Conference Board's May consumer confidence reading is due later today. Base Metals Copper is caught between a weaker dollar and rising energy costs that threaten to squeeze global manufacturing. LME copper warehouse stocks fell to a ten-week low of 275,525 tonnes as of last Thursday, a notable drawdown from elevated levels seen earlier this year. Analysts at KCM Trade noted that a peace deal that meaningfully lowers oil would "significantly boost the attractiveness of base metals." Nickel shed 1.2% as Nornickel recommended no dividend for 2025, prioritising financial stability for a fourth consecutive year. China could become a net refined zinc exporter for the first time in four years in 2026, with Macquarie forecasting 30,000 tonnes of net exports as domestic supply growth outpaces demand. Tin continues to rally on tight supply fundamentals and speculative momentum. Precious Metals Gold slipped roughly 1% to around $4,526 as fresh U.S. strikes on Iran pushed oil higher, fuelling concerns that elevated energy prices will keep rates higher for longer. Markets are pricing a 56% probability of a Fed hike by year-end. Silver tumbled 3% to $75.69, while platinum lost ground to around $1,953 and palladium fell 1.2% to $1,381. OANDA's Kelvin Wong warned that even with a peace deal, damage to Middle East production facilities could prevent rapid normalisation of oil flows, keeping the inflation-rate dynamic firmly in play for precious metals. Steel China's steel output fell 2.8% year-on-year in April to 86.63 million tonnes — the weakest April since 2018 — as property weakness and a 9% drop in steel exports weigh on production. A deadly gas explosion at a Shanxi coal mine killed 82 people, triggering widespread safety shutdowns that analysts estimate could cut coking coal supply by 10–15% in late May and June. Coking coal futures hit their daily price limit, surging 8%. Indonesia imposed a 17.5% anti-dumping tariff on flat-rolled iron products from Wuhan Iron and Steel, effective from late June. Vietnam's Hoa Phat expressed interest in developing the country's largest idle iron ore mine, with reserves exceeding 500 million tonnes. Rare Earth Metals Myanmar's military has launched renewed offensives into Kachin State, a region rich in heavy rare-earth elements along the Chinese border that produces roughly half of the world's heavy rare earths. The Kachin Independence Army, which took control of the mining belt in October 2024, said it has prepared defences. Any disruption to these deposits would tighten supply of materials critical for wind turbines and electric vehicles, adding to existing concerns about China's dominance in rare earth processing. Forex The euro eased 0.1% to $1.1633 on Tuesday as the dollar regained some safe-haven appeal following the latest U.S. strikes on Iran. Sterling slipped to $1.3488 and the yen was flat at 158.94. Last week's flash PMI data showed the eurozone economy contracted in May at its fastest pace since late 2023, with S&P Global warning that inflation could approach 4% in coming months. Money markets are now pricing at least two ECB rate hikes before year-end, a dramatic shift from the easing expectations that prevailed before the Iran conflict began in late February. Watch Today The Conference Board's U.S. Consumer Confidence Index for May is due at 15:00 GMT, expected to edge lower to 92 amid elevated gasoline prices. The Fastmarkets Copper Seminar opens in London this week. European traders should monitor any further developments from the Doha talks, where the pace of U.S.-Iran negotiations will set the tone for oil, the dollar, and by extension the entire metals complex.