Metals daily

This Morning Selling was concentrated in aluminium and tin early Tuesday compared with Monday’s official close. Aluminium fell 1.6% and tin lost 1.1%, while copper and zinc both declined 0.3%. Nickel moved against the trend, gaining 0.9%, and lead was virtually unchanged. The mixed opening shows that tight supply is supporting selected contracts, but traders remain cautious before US inflation data. Macro & Geopolitics Lower oil prices improved the wider market mood after the US signalled that it would hold off on further attacks against Iran for the time being, while investors watched for possible peace talks. Asian shares rallied and European equity futures pointed higher, although any breakdown in diplomacy could quickly reverse the relief. Attention now turns to October US inflation figures, with headline prices expected to rise 0.3% from September and core prices by 0.2%. Markets put the chance of a Federal Reserve rate increase in December at 84%. For European metal users, cheaper energy is helpful, but another US rate rise could strengthen the dollar and raise euro-denominated purchasing costs. Base Metals Copper slipped in early Tuesday trading despite severe supply tightness in China. Chinese copper concentrate imports fell 11% year on year in October, while exchange-monitored stocks stood at only 33,848 tonnes and the Yangshan import premium reached a record $230 a tonne. These conditions should limit the downside, although uncertainty surrounding technology investment and US tariff policy continues to encourage financial selling. Aluminium and tin recorded the morning’s largest losses, while zinc also eased. Nickel gained 0.9%, outperforming the complex, and lead remained broadly flat. Lower oil prices offer some cost relief for smelters and manufacturers, but today’s US inflation release may set the wider direction. Precious Metals Gold fell 0.6% to around $4,114 an ounce as traders took profits following Monday’s rally. Silver declined 0.5% to $53.14 and palladium eased 0.2% to $1,039.47, while platinum held near $1,576. Lower oil prices have reduced immediate inflation concerns, but expectations of a December US rate increase are limiting demand for metals that do not pay interest. The next move is likely to depend heavily on the US inflation figures due this afternoon. Steel A fatal explosion at the Habas iron and steel plant in Aliaga, western Turkey, killed 16 people and injured 14, according to the latest reported figures. The accident occurred during liquid-steel casting after a crane fell into an electric arc furnace. The scale and duration of any resulting production disruption remain unclear. In China, October steel exports dropped 6.1% from September to a six-month low of 9.85 million tonnes, partly because the stronger yuan reduced exporters’ price advantage. Weak mill margins also point to cautious demand for raw materials and scrap. Rare Earth Metals China exported 4,386 tonnes of rare earths in October, up 2.7% from September and 1% from a year earlier. However, shipments across the first ten months remained 8.7% lower year on year. Myanmar is pressing the US to invest more quickly in its deposits as Washington seeks alternatives to Chinese-dominated supply chains. Progress will be difficult because Myanmar remains divided by civil war and important heavy rare earth mining areas in Kachin are controlled by the Kachin Independence Army. China still produces about 90% of the world’s rare earth magnets. Forex The euro began Tuesday in a stronger position after gaining 0.7% to around $1.122 against the dollar on Monday, helped by falling oil prices and improved risk appetite. The dollar was steadier during Asian trading as investors waited for US inflation data. A stronger-than-expected reading could lift US yields, renew dollar buying and make dollar-priced metals more expensive for European traders. Currency strength is also affecting physical trade elsewhere, with the firmer yuan reducing the competitiveness of Chinese steel exports. Watch Today China’s October credit, money-supply and new-loan figures are scheduled during the European morning. The main event is US consumer inflation at 13:30 GMT, or 14:30 CET, which could change expectations for December’s Federal Reserve meeting and move the dollar, metals and European purchasing costs.