Metals Daily

This Morning The LME complex is softer across the board this Tuesday morning, extending Monday's weakness as weak Chinese macro data and elevated bond yields continue to weigh. Copper 3-month is trading at $13,499, down 0.7% from Monday's official close of $13,588, while cash copper sits at $13,463 (-0.5%). Tin is the sharpest decliner, with 3-month at $52,000 — a 1.1% drop from Monday's $52,563 close — unwinding some of its recent speculative premium. Aluminium is off 0.3% at $3,558, nickel has shed 0.4% to $18,495, zinc is 0.4% lower at $3,509, and lead is the most contained, slipping 0.4% to $1,975. Macro & Geopolitics Trump's decision to pause a planned military strike on Iran and his claim of a "very good chance" of a nuclear deal sent oil prices down more than 2% in early Asian trade, with Brent easing below $110 — though still over 50% above pre-war levels. The relief was tempered by a global bond rout that saw 30-year U.S. Treasury yields hit their highest since before the 2007 financial crisis, while Germany's 10-year Bund yield touched a 15-year peak. G7 finance ministers meeting in Paris acknowledged mounting concern over public debt and bond market volatility. Markets are now pricing in rate hikes from major central banks. Kevin Warsh will be sworn in as Fed chair on Friday, inheriting an intensifying inflation challenge. Base Metals Monday's disappointing Chinese data — industrial production grew just 4.1% in April versus 5.9% expected, the slowest since July 2023 — triggered further long liquidation across the complex. Copper fell to a one-week low before recovering slightly on dollar softness. Aluminium remains the standout structural story: Citi now forecasts $4,000/t within three months, citing a potential 3-million-ton supply shock from the Iran war's disruption to Gulf output, which accounts for nearly 9% of global supply. Separately, Tsingshan has asked nickel pig iron producers at Indonesia's Weda Bay to curtail output in June to redirect power to its aluminium smelter, a sign that widening aluminium margins are already cannibalising NPI production. The LME has confirmed new daily price limits for lead and zinc, reducing them from 15% to 12% effective June 8. Precious Metals Gold steadied around $4,560 after hitting its lowest since late March on Monday, caught between a weaker dollar and surging bond yields. J.P. Morgan has cut its 2026 average gold price forecast to $5,243 from $5,708, citing softer investor demand as rate-hike expectations intensify. The bank noted that resolution of the Iran conflict remains key to re-stoking gold demand. Silver slipped to $77.58, platinum eased to $1,976, and palladium dropped to $1,410. Ghana has raised its gold offtake requirement from miners to 30% of annual output from 20%, targeting 157 tons of reserves by 2028. Steel China issued a tougher steel capacity swap plan requiring at least 1.5 tons of old capacity to exit for every ton of new capacity built, up from previous ratios, with differentiated rules favouring EAF and hydrogen metallurgy. After a two-year transition, inter-company capacity transfers will only be permitted through substantive mergers. In Europe, the Commission confirmed that steel safeguard renewals are on track for a July 1 implementing act specifying quotas, with measures applying to all partners including Switzerland — only EEA countries are partly exempt. Rare Earth Metals German Finance Minister Klingbeil told G7 counterparts in Paris that the bloc has "no time to lose" in reducing rare earth dependency on China, proposing recycling quotas and expanded procurement. He drew a direct parallel between the Iran war's exposure of fossil fuel dependency and the existing vulnerability in critical minerals supply chains. Japan's Finance Minister Katayama indicated the G7 communiqué will likely include a statement on critical minerals pricing. The push comes as tungsten prices have surged fivefold since October to around $3,000/t following Chinese export curbs, forcing U.S. drill bit manufacturers to shift heavily toward steel-body designs. Forex The euro edged to $1.1643, down 0.1% in early Tuesday trade, hovering near one-month lows as the Iran war's inflationary fallout darkens the eurozone growth outlook. Markets have fully priced in ECB rate hikes. The dollar index fell 0.33% on Monday to 99.03 as Treasury yields retreated from session highs. Sterling slipped to $1.3419 after diving 2.3% last week amid UK political instability. The yen remained under pressure near 159 per dollar, with Japanese authorities signalling readiness to intervene. Watch Today UK employment data for March lands at 07:00 CET, closely watched given the Bank of England's inflation dilemma. Eurozone trade balance for March is due at 11:00 CET. ECB's Philip Lane and Claudia Buch are both scheduled to speak. Nvidia reports earnings on Wednesday — a key test for risk sentiment given the chipmaker's outsized market influence.