Metals Daily

This Morning Base metals opened mixed on Monday compared with Friday’s close. Zinc led the gains, rising 0.5%, while nickel added 0.2% and copper edged 0.1% higher. Aluminium and lead were both down 0.4%, making them the weakest performers. Tin was virtually unchanged, pointing to a cautious rather than broad-based start to the week. Macro & Geopolitics Lower oil prices and firmer Asian shares improved market sentiment, but bond markets remained under pressure after last week’s rate increases. Brent fell 1.7% to about $102 a barrel as Saudi exports recovered, although fighting in the Middle East continued to threaten shipping and energy supplies. Markets priced in a 56% chance of another US rate increase in October, while several central banks in Europe and elsewhere were also expected to tighten before year-end. US-China talks produced plans for further work on tariffs and AI safety, but no reported progress on critical-mineral flows. Presidents Donald Trump and Xi Jinping were due to meet in Washington later in the week. Base Metals Copper held firm as strong Chinese demand and tight mine supply outweighed concerns about higher borrowing costs. The Yangshan copper import premium reached $124 a tonne, its highest in nearly four years, with Chinese buyers restocking before the National Day holiday. August customs data showed China’s copper scrap imports rose 15.3% from a year earlier, despite declines in cathode and concentrate imports. Zinc was the morning’s strongest metal, while nickel also gained even as China’s refined nickel imports fell 45.1% year on year. Aluminium remained under pressure after Chinese imports of both primary metal and scrap dropped by roughly a quarter. Precious Metals Gold slipped 0.3% to around $4,363 an ounce as rising bond yields reduced demand for non-interest-paying assets. Middle East tensions continued to provide some support, but investors focused on the risk of further global rate increases. Silver rose 0.2% to $66.37, palladium gained 0.6% to about $1,310 and platinum eased 0.1% to roughly $1,798. Precious metals may remain sensitive to oil prices and central-bank comments. Steel China’s steel scrap imports increased 14.9% year on year in August, indicating stronger use of overseas recycled feedstock, although total volumes remained modest at 24,935 tonnes. In Saudi Arabia, East Pipes and Group Five Pipe separately announced contracts with Saudi Aramco, supporting the outlook for regional energy-pipeline demand. For European processors, lower oil prices could provide some relief on production and transport costs, but crude above $100 a barrel continued to leave energy-intensive steel operations facing significant cost pressure. Rare Earth Metals Critical-mineral supply remained unresolved ahead of this week’s US-China summit, with American officials saying Chinese deliveries were still insufficient. Separately, reports that state-owned China Rare Earth Group was in talks to acquire control of Shenghe Resources were contradicted by Shenghe’s controlling shareholder, which said it had no plan to transfer its controlling stake to external parties. Tightness was also spreading beyond conventional rare earths: gallium and germanium prices outside China were reported to be nine to ten times their 2023 levels. Western production projects were advancing, but substantial reliance on Chinese material was expected to continue. Forex The euro was steady near $1.148 early Monday after losing almost 1% last week. Concerns over French government borrowing pushed the extra yield demanded on French debt to its widest since the euro-zone debt crisis, while poor election results for Chancellor Friedrich Merz’s conservative party could add pressure to European bonds. A soft euro makes dollar-priced primary metal and scrap imports more expensive for European buyers. The dollar held close to 157 yen, with traders alert to possible Japanese intervention after authorities reportedly checked exchange rates on Friday. Watch Today European traders will watch speeches from ECB President Christine Lagarde and ECB board member Piero Cipollone for signals on monetary policy. Bank of Canada Governor Tiff Macklem and Chicago Fed President Austan Goolsbee were also scheduled to speak, with their comments potentially moving the dollar, bond yields and metals.