Metals Daily

THIS MORNING At the start of Friday’s business day, the supplied indications show tin 5.6% above Thursday’s official close, the largest positive gap. Zinc is 3.7% higher, copper 3.2% higher and aluminium 1.5% higher. Lead is 3.1% below Thursday’s close, while nickel is 2.9% lower. However, the indications are dated October 9, so they are historical reference levels rather than live Friday prices. MACRO & GEOPOLITICS Global markets remain defensive after heavy selling in technology shares raised doubts about the scale and returns of AI investment. Investors moved into government bonds, pushing the US 10-year yield back below 5% and reducing expectations for further Federal Reserve rate increases. However, Brent crude rose above $113 a barrel as Houthi attacks in Saudi Arabia heightened concerns about further disruption to energy supplies. France remains another European concern, with its 10-year yield around 5.06% and its spread over German borrowing costs at a 15-year high. Expensive energy and continued bond-market stress may weigh on industrial demand and scrap processors’ margins. BASE METALS Nickel fell 2.0% in early LME trade as traders questioned whether proposed Indonesian production cuts would be large or lasting. High warehouse stocks and weak stainless steel and battery demand continue to limit support. Copper recovered 0.6%, although Thursday’s build in LME inventories had pushed it to a five-week low. Physical supply remains uneven: China’s import premium reached its highest level since 2014, while about 62% of LME copper stocks are held in the United States. Aluminium was nearly flat. Disruption to Gulf aluminium supplies is keeping European premiums firm, although Rio Tinto’s new bauxite investment and expanding Asian alumina production could increase raw-material availability over time. Zinc and lead rose modestly, while tin slipped. PRECIOUS METALS Gold traded near $4,016 an ounce and was heading for its steepest weekly loss in more than four months. High oil prices are reviving inflation concerns and reducing hopes for lower US interest rates, outweighing safe-haven buying linked to weaker equity markets. Silver fell to around $54, with platinum also lower and palladium broadly steady. All four metals were on course for weekly declines, leaving precious-metal scrap values exposed to further interest-rate and currency swings. STEEL Fresh investment plans underline the continuing push to modernise North American steel capacity. Nippon Steel reportedly intends to spend about $3 billion upgrading hot-rolling equipment at U.S. Steel’s Mon Valley works, while Welspun secured a $580 million order through its US subsidiary to supply coated line pipe for a natural-gas pipeline serving a large data-centre complex. Canada also gave Cleveland-Cliffs 15 days to reverse planned job cuts at its Ontario mill or risk penalties. For European traders, stronger state involvement and large US investment commitments could keep international steel and scrap flows increasingly regional. RARE EARTH METALS General Motors cancelled a long-term agreement to buy rare-earth magnets from a new US plant operated by VAC’s US unit, e-VAC Magnetics, prompting arbitration. The factory has annual capacity of almost 2,000 tonnes and had expected GM to take 90% of its output. The dispute highlights the difficulty of building Western magnet supply chains while electric-vehicle demand and policy support are changing. It may also complicate Energy Fuels’ planned $1.9 billion purchase of VAC and underscores China’s dominant position in permanent magnets. FOREX The euro ended Thursday near $1.122 against the dollar, while concerns over French public finances contributed to pressure on European markets even as US Treasury yields dropped sharply. A weaker euro increases the local-currency cost of dollar-priced metals for European buyers. The yen and Swiss franc strengthened as investors moved toward safer currencies during the technology-led sell-off, while the dollar eased against both in Asian trading. Currency direction may remain unsettled because weaker risk appetite supports safe havens, but high oil prices still favour tighter US monetary policy and could restore support for the dollar. WATCH TODAY Flash October manufacturing and services PMIs are due from France, Germany, the wider euro area, the UK and the United States. European traders will also watch UK and Canadian retail sales and comments from European Central Bank board member Piero Cipollone. The data could move the euro and provide fresh signals on industrial demand.