Metals Daily

This Morning Copper is trading at $12,791 on Tuesday, a 0.5% discount to Monday's close of $12,856. Tin leads declines at -1.0% to $47,770, nickel shed 0.5% to $17,360 and zinc is marginally softer at $3,262. Lead firmed 1.2% to $1,924 and aluminium edged up 0.4% to $3,410. The complex remains caught between Gulf supply support and demand anxiety as oil holds above $100/bbl. Macro & Geopolitics The U.S.-Israeli war on Iran, now in its third week, continues to dominate. Global equities edged higher as LPG tankers crossing the Strait of Hormuz over the weekend suggested Iran maintains some leniency on energy exports to allied countries. Brent rose to $103/bbl after Bessent said Washington was "fine" with some ships transiting the strait, though Iran denied wanting a truce. European allies including Germany, Italy and Spain rebuffed Trump's call to send warships. Ten-year Treasury yields fell 5bp to 4.23%, the dollar index weakened 0.7% to 99.7, and markets now price 25bp of Fed cuts and nearly 40bp of ECB hikes by year-end. The RBA hiked 25bp to 4.1% in a tight 5-4 vote. Base Metals Base metals ended mostly higher on risk-on sentiment. Copper inventories have risen for 21 consecutive weeks, climbing 124% to a multi-decade high of 1.28Mt. LME and SHFE each added around 30kt, while the cash-to-three-month spread has widened to its deepest contango in nearly two years at $105/t — signalling a supply overhang that Middle East risks could exacerbate. Aluminium is supported by Gulf disruptions: Alba has shut 19% of its 1.623Mt/year capacity citing Hormuz disruptions, while Qatar has curtailed output on gas shortages. Kazakhstan's refined copper fell 9.1% year-on-year and refined zinc dropped 12.0%. Precious Metals Precious metals remained volatile, with profit-taking offset by a weaker dollar. Gold eased 0.5% to $4,993, with no Fed cut now priced for March and the probability of any 2026 cut falling to 80%. Gold ETF holdings have shed 31t this month; silver ETFs slipped 6Moz to 817Moz. Platinum surged 4% to $2,103 and palladium gained 3.1% to $1,599. Silver is holding the $80/oz support zone — a break could target $72 and $64. The BIS urged central banks to "look through" the energy shock if temporary. Steel ArcelorMittal Kryvyi Rih will close two more rolling mills in Ukraine on soaring energy costs and CBAM pressure, with job cuts potentially reaching 3,400. Britain is reportedly planning to double steel import tariffs to 50%. Iron ore rose to $108/t — the Middle East is the key producer of Direct Reduced Iron, mostly from Iran, threatening supply to steel producers across Asia and Europe. Rare Earth Metals U.S.-China talks in Paris covered rare earth flows, with USTR Greer reaffirming Washington's need for continued access. Despite the Busan truce pausing Chinese export controls, U.S. aerospace and semiconductor firms still face worsening shortages of materials including yttrium. The U.S. is set to sign an MOU with Brazil's Goiás state on critical minerals cooperation. Forex The dollar index fell to 99.78, the euro gained 0.8% to $1.1508, and the yen sits at 159.4 — near the 160 intervention threshold. Markets face a packed macro week with Fed, ECB and BoE decisions ahead; investors will watch closely whether policymakers acknowledge the stagflation risks from the oil shock. Watch Today Fed two-day meeting begins today, decision Wednesday. Germany's ZEW sentiment index due at 10:00 GMT. U.S.-China talks continue in Paris as Bessent and He Lifeng work toward deliverables for a potential Trump-Xi summit.