Metals Daily

This Morning Monday began with broad selling across base metals, with all six contracts trading below Friday’s official close. Tin led the decline, falling 1.5% to $53,440 a tonne, while copper dropped 1.0% to $14,470. Zinc and aluminium were both down 0.7%, at $3,870.50 and $3,235.50 respectively. Nickel lost 0.6% to $16,060, while lead was the most resilient, easing 0.1% to $1,905. Macro & Geopolitics Higher energy prices and borrowing costs set a difficult backdrop for metals on Monday. Brent crude climbed to about $107 a barrel after U.S. President Donald Trump rejected Iran’s proposal to reopen the Strait of Hormuz, keeping concerns about supply disruptions alive. Markets priced in roughly a two-thirds chance of another Federal Reserve rate increase in October, while long-term U.S. Treasury yields remained near multi-year highs. For European businesses, expensive oil raises transport and smelting costs, while higher global interest rates increase financing expenses. Chinese industrial profit growth also slowed in August, adding to concerns about demand from the world’s largest metals consumer. Base Metals Copper touched a 10-day low as the oil rally, a stronger dollar and weaker Chinese profit data encouraged selling. Demand in China may receive some support from restocking ahead of this week’s seven-day National Day holiday, but high prices and elevated physical premiums could limit buying. Aluminium, zinc, nickel, lead and tin also declined, suggesting that broader economic pressures were a major driver of the move rather than any single metal-specific development. For European scrap traders, falling exchange prices could weigh on mill bids, although higher diesel, electricity and financing costs may prevent physical scrap values from falling by as much. Precious Metals Gold fell 2.7% to about $4,172 an ounce, its lowest level since early August, as rising oil prices strengthened expectations of further U.S. interest-rate increases. Silver dropped 4.3% to $61.51, while platinum declined 2.8% to $1,728 and palladium lost 3.1% to about $1,228. Higher bond yields make non-interest-bearing precious metals less attractive, while the stronger dollar adds pressure for buyers using euros and other currencies. Steel ArcelorMittal said it was shutting production at Ukraine’s largest steel plant, underscoring the growing operational and economic risks from Russian airstrikes. The closure could tighten regional supply at the margin, although demand and energy costs remain important factors for European steel and scrap pricing. Separately, Rio Tinto and China’s Shougang Group commissioned a trial facility that can capture up to 10,000 tonnes of carbon dioxide a year from blast-furnace gas. The project demonstrates continued investment in lower-carbon steelmaking, although its capacity remains small compared with commercial steel production needs. Forex The dollar stayed close to a two-month high as markets prepared for U.S. interest rates to remain higher for longer. The euro traded near $1.138, down about 2% in September, while sterling held near a three-month low at about $1.324. A weaker euro raises the local cost of dollar-priced primary metal, fuel and freight for European companies. That can support euro-denominated scrap prices, although Monday’s decline in London Metal Exchange metals partly offsets the currency effect and may make buyers more cautious. Watch Today The Dallas Federal Reserve’s September manufacturing survey is due later on Monday. Markets will also hear from Federal Reserve officials, including Vice Chair for Supervision Michelle Bowman, Governor Lisa Cook and Richmond Fed President Thomas Barkin, as well as European Central Bank President Christine Lagarde and Bank of England Deputy Governor Dave Ramsden. Comments on inflation and the outlook for further rate increases could move the dollar, euro and metals prices.