Metals Daily

This Morning At the start of Monday’s business day, the latest available trading indications from Friday showed a mixed base-metals market. Lead was the main faller, down 1.6% from Friday’s official close at $1,820 a tonne. Aluminium led the gains, rising 0.7% to $3,055, while nickel added 0.2% to $15,460. Copper eased 0.1% to $14,529, with tin and zinc virtually unchanged at $52,900 and $3,805 respectively. Macro & Geopolitics Oil prices eased after a surprise US announcement of an energy ceasefire between Russia and Ukraine raised hopes of additional Russian exports, although neither side had clearly confirmed an agreement. Brent traded near $103 a barrel, but continuing attacks on shipping and airports in the Gulf left energy-supply risks high. Markets are preparing for US inflation figures on Wednesday, followed by producer prices and retail sales on Thursday. Investors see an 18% chance of an October Federal Reserve rate rise and roughly an 85% chance of one in December. In Europe, high borrowing costs and concerns about government deficits remain important headwinds. Base Metals Copper started the week firmer as supply problems in Chile combined with signs of stronger Chinese buying. Codelco suspended part of the El Teniente operation after a fatal landslide that killed two workers, while a strike continued at Antofagasta’s Centinela mine. The Yangshan import premium rose to $135 a tonne, its highest level in four years, although Shanghai warehouse stocks increased sharply after China’s holiday. Aluminium and zinc also edged higher, while nickel and tin recorded smaller gains. Lead was steady in early LME dealings. Lower oil prices offer some relief on smelting and transport costs, but high interest rates continue to threaten industrial demand. Precious Metals Gold moved slightly higher above $4,190 an ounce as softer oil and a modestly weaker dollar provided support. Traders were reluctant to take large positions before this week’s US inflation releases, which could reshape interest-rate expectations. Silver advanced to around $61 an ounce, while platinum and palladium both gained close to 1%. Lower energy prices are helpful for the complex, although the possibility of further US rate increases limits the appeal of metals that do not pay interest. Steel Chinese steel futures were mixed as mills remained cautious following the National Day holiday. Rebar and hot-rolled coil posted small gains, helped by expectations that more producers will rebuild raw-material stocks this week. Lower spot coke prices have reduced some pressure on mill margins and could slow planned production cuts. Stainless steel moved lower, however, showing that demand remains uneven. Traders will watch whether post-holiday buying develops into sustained orders or fades once immediate factory needs have been covered. Rare Earth Metals Arafura Rare Earths signed a binding agreement to supply 850 tonnes a year of neodymium-praseodymium oxide. The contract runs for five years, with an option for a two-year extension, and uses pricing linked to a global seaborne index. The deal adds to efforts to develop rare-earth supply outside China, an important consideration for manufacturers seeking more secure material flows. Forex The euro remained under pressure near $1.12 after declining for five consecutive weeks. Concern about European government deficits continued to weigh on the currency. The dollar index held close to a 17-month high as investors remained focused on the Middle East conflict and US monetary policy. A weak euro makes dollar-priced metals more expensive for European buyers, even when LME prices are stable. The yen was steadier as traders remained alert to possible Japanese intervention. Watch Today China is scheduled to publish September figures for new bank lending, money-supply growth and total social financing at 08:00 GMT. Stronger credit growth could support copper and other industrial metals by improving expectations for Chinese construction and manufacturing demand.