Metals Daily

This Morning Base metals were narrowly mixed early on Tuesday compared with Monday’s official close. Copper led the market, gaining about 0.6%, while aluminium, tin and zinc each edged roughly 0.1% higher. Lead was the weakest performer, falling about 0.9%, and nickel declined 0.3%. The split market suggests copper-specific buying rather than a broad rise across the complex. Macro & Geopolitics Global risk sentiment improved as technology shares rallied and Brent crude steadied near $100 a barrel after four sessions of losses. Lower oil prices reduce some pressure on inflation and industrial costs, but major central banks remain inclined to raise rates further. The dollar stayed firm as markets put the chance of another US rate increase in October at 56%. Attention is also turning to Thursday’s meeting between Presidents Donald Trump and Xi Jinping, where trade and artificial intelligence are expected to feature, with critical-mineral supplies also potentially on the agenda. Possible US-Iran talks at the United Nations are being watched for their effect on energy prices and shipping risk. Base Metals Copper advanced for a sixth session, supported by expectations of strong Chinese demand and restocking before holidays beginning later this week. The Yangshan import premium eased to $119 a tonne but remained 65% above the start of September, while available LME warehouse stocks fell to 133,725 tonnes after 9,600 tonnes of further cancellations in Asia. These signs of tight nearby supply helped copper move back towards its record high. Aluminium, zinc and tin made only small gains this morning. Nickel fell despite reports that drought linked to El Niño would force production cuts at an Indonesian nickel hub. Lead declined after reaching a three-month high on Monday. Precious Metals Gold was little changed near $4,342 an ounce as geopolitical risk was balanced by expectations that US interest rates will stay high or rise further. The stronger dollar also limited demand from buyers using other currencies. Silver slipped 0.1% to $65.99, platinum fell 0.6% to about $1,786 and palladium declined 0.4% to roughly $1,296. Oil prices and Federal Reserve comments remain important short-term drivers because of their influence on inflation expectations and bond yields. Steel The outlook for European flat-steel demand remains clouded by deeper restructuring in Germany’s car industry. Volkswagen said it would increase its cost-cutting programme after lowering its profit outlook, with a further 50,000 job reductions planned as European producers face high costs and Asian competition. This points to continued caution among automotive steel buyers. Demand signals elsewhere were firmer: India’s steel production increased 3.4% year on year in August, accelerating from revised growth of 1.9% in July. Rare Earth Metals Rare-earth shortages are pushing aerospace suppliers to test older, rare-earth-free coatings for jet-engine parts. European producer Oerlikon Metco is developing zirconia-based alternatives, although industry experts say replacing Chinese material will take years rather than months. China’s dominant supply position is therefore likely to remain relevant to discussions around the US-China summit. Separately, the Inter-American Development Bank called for long-term purchase contracts, additional financing and minimum-price protection to encourage responsibly produced critical minerals. Such measures could support new Western projects but would take time to improve physical availability. Forex The dollar index held near a seven-week high at 100.4 as traders increased bets on another Federal Reserve rate rise. This keeps pressure on the euro and raises the local cost of dollar-priced metal, energy and freight for European buyers. Concern about French public finances also remains a weight on regional assets ahead of September euro-zone consumer-confidence data. The yen traded around 157.4 per dollar, keeping markets alert to possible intervention by Japanese authorities. Watch Today The euro zone’s preliminary September consumer-confidence reading is due at 14:00 GMT. European traders will also monitor remarks from ECB officials Philip Lane, Piero Cipollone and Boris Vujcic, alongside speeches from senior Federal Reserve policymakers, for signals on further rate increases.