Metals Daily

THIS MORNING Base metals are mixed early Wednesday, with four contracts above Tuesday’s official close and two below. Aluminium is the strongest mover, up 0.5% at $3,134 a tonne, followed by lead, up 0.3% at $1,837, and tin, up 0.2% at $54,135. Nickel is little changed at $15,490, while zinc has fallen 0.2% to $3,757. Copper is also down 0.2% at $14,383.50, although strike action at Chile’s Centinela mine may limit selling pressure. MACRO & GEOPOLITICS Higher oil prices and a firmer dollar are setting a cautious tone for European markets. Brent has climbed above $101 a barrel as a storm threatens U.S. Gulf production and Houthi attacks on Saudi Arabia raise fresh supply concerns. Investors are also awaiting minutes from the Federal Reserve’s September meeting. Markets now see roughly a one-in-five chance of an October rate increase, while a December move remains widely expected. In Europe, French bonds and the euro have recovered after far-right presidential candidate Marine Le Pen outlined plans to cut spending, although France’s fiscal position remains a concern. European equity futures are lower this morning. BASE METALS Copper is slightly weaker as dollar gains and rising energy prices outweigh immediate supply concerns. Two unions at Chile’s Centinela mine will begin a strike after government-mediated wage talks failed, while Codelco is investigating whether some 2024 and 2025 production was counted twice. Aluminium is leading the gains, helped by concern that heightened Middle East tensions could disrupt supply. Zinc is softer as rising Chinese exports ease tightness on the London market. Nickel is nearly flat; BHP’s agreement to sell its suspended Kambalda nickel concentrator and associated tenements underlines the sector’s difficulties, while Sumitomo expects the global nickel market to remain in surplus in 2027. Lead and tin are modestly higher. PRECIOUS METALS Gold has fallen 0.6% to about $4,138 an ounce as the stronger dollar reduces buying interest ahead of the Fed minutes. Silver is down 1.5% near $60.79, platinum has eased 0.3% to around $1,697 and palladium is 1% lower near $1,160. China’s central bank added to its gold reserves for a 23rd consecutive month in September, providing longer-term support, but high interest rates remain a near-term obstacle for precious metals. STEEL India’s steel ministry is unlikely to seek fresh import restrictions despite finished-steel imports rising 29.5% year on year during April-August. Domestic mills have recently increased prices as coking-coal costs and demand have strengthened. South Korea’s new 10-year green transformation strategy includes a target for the world’s first mass production of hydrogen-reduced steel. In Europe, stainless-steel producer Aperam expects high energy costs to reduce quarterly EBITDA by about €20 million, highlighting the pressure that expensive power continues to place on regional mills. FOREX The euro is holding just above $1.1250 after recovering from this week’s 17-month low, supported by calmer French bond trading. The dollar index has risen to around 102.05 as investors prepare for the Fed minutes and further U.S. government debt sales. Sterling is slightly softer near $1.326. For European scrap companies, the euro’s rebound may offer some relief when purchasing dollar-priced metals and fuel, but renewed oil-driven inflation or a more aggressive message from the Fed could quickly reverse that improvement. WATCH TODAY Germany’s August industrial production figures are due this morning and may influence the euro and European industrial shares. Later, the Federal Reserve will publish minutes from its September 15-16 meeting, while several Fed officials are scheduled to speak. A $39 billion U.S. 10-year Treasury auction could also affect bond yields, the dollar and metals prices.