Daily metals

Early Tuesday, two of the six base metals were trading above Monday’s official closes. Lead was the strongest, up 0.6% at $1,851 a tonne, while nickel gained 0.2% to $16,660. Tin and zinc led the declines, both down 0.8% at $55,000 and $3,737 respectively; copper slipped 0.3% to $14,113.50 and aluminium eased 0.2% to $3,255.50. The softer opening points to profit-taking and renewed demand concerns after Monday’s copper-led strength. Macro & Geopolitics Risk appetite weakened as the U.S.-Iran ceasefire expired without a permanent agreement and Tehran threatened a more offensive posture. Brent crude climbed above $91 a barrel, reviving inflation concerns and pushing long-dated government borrowing costs higher despite soft economic data. The U.S. 30-year Treasury yield reached its highest level since 2007, while European equity futures declined. China added to the cautious tone: July industrial output growth slowed to 4.5%, and fixed-asset investment contracted 6.7% during January-July. Markets nevertheless priced in roughly a 65% probability that the Federal Reserve would leave rates unchanged in September. Base Metals Copper retreated as weak Chinese activity figures shifted attention from limited nearby supply to end-user demand. The Yangshan import premium fell to $85 a tonne, its lowest since July 10, indicating reduced appetite for imported metal at elevated prices. Supply remains tight on the LME, where inventories have halved since May and Monday’s cash-to-three-month premium reached $553.25 a tonne. Lead and nickel were the only early gainers, while tin and zinc underperformed. Indonesia’s planned commodity exchange, scheduled to launch on January 1, may eventually influence nickel price discovery, although trading rules and transition arrangements remain under development. Precious Metals Gold fell 0.5% to around $4,391 an ounce as rising Treasury yields increased the opportunity cost of holding non-yielding assets. Higher oil prices also complicated the outlook by increasing inflation risks even as weaker U.S. data reduced expectations of a September rate increase. Silver dropped 1% to $65.11, while platinum and palladium each lost 1.2%, trading near $1,749 and $1,317 respectively. Attention now turns to Wednesday’s Federal Reserve minutes. Steel Chinese crude steel production fell to 76.93 million tonnes in July, down 3.6% year on year and the weakest July since 2017. Construction and housing remain the principal drags, while expanding vehicle exports provide only a partial offset. Steel exports declined 4% during the first seven months, inventories are elevated and only about one-third of Chinese mills were profitable at the end of July. Separately, Algoma Steel suspended electric-arc-furnace operations after a power-plant outage, warning that shipments could be affected if the disruption approaches its estimated 21-day maximum. Rare Earth Metals Australian project news offered limited near-term direction. Marquee Resources said its proposed tungsten acquisition cannot proceed in its current form and is considering sales, joint ventures or a separate vehicle for non-core assets, including the Redlings rare-earth project. Ark Mines also entered a trading halt pending rare-earth drilling results and a response to an exchange price query. Neither development involved an announced change to current production or physical supply. Forex The euro remained near its strongest level in two months after trading as high as $1.1614 on Monday, supported by reduced expectations of an imminent Federal Reserve move. The dollar index stabilised around 99.60 early Tuesday as higher Treasury yields offset the effect of weaker U.S. data. For euro-area scrap processors and metal consumers, the firmer single currency continues to soften the local-currency impact of elevated dollar prices, although higher energy costs may erode that advantage through freight, smelting and manufacturing expenses. Watch Today UK labour-market figures are due this morning, followed by the German and eurozone ZEW sentiment surveys. U.S. housing starts, import prices and industrial production arrive later in the day and may affect the dollar and growth-sensitive metals. Traders will also monitor developments surrounding the expired U.S.-Iran ceasefire and potential risks to energy supplies through the Strait of Hormuz.