Daily Metals

This Morning Base metals are mixed in early Tuesday trading (06:06 GMT) as markets digest the BOJ rate hike and await the Fed. Copper trades at $13,662.50, down 0.1% from Monday's official close of $13,669.66. Aluminium at $3,346.50 is off 0.4%, extending its sharp selloff. Nickel bucks the trend at $17,800, up 0.6% from Monday's $17,691.53 close. Lead ($1,963, +0.2%) and zinc ($3,561.50, -0.3%) are little changed. Tin is the notable laggard, trading at $54,625, down 0.5% from Monday's $54,926 close after giving back some of its recent surge. Macro & Geopolitics The Bank of Japan hiked rates to 1% — a 31-year high — in a 7-1 vote, as expected. The yen barely moved, holding near 160.30 against the dollar. The RBA held at 4.35%. All eyes now turn to the Fed's two-day meeting starting today, Chair Warsh's debut, with rates expected to hold at 3.50–3.75% but the updated dot plot and press conference tomorrow set to be the most closely watched monetary policy event of the year. The US-Iran peace deal euphoria is fading; shippers say Hormuz transit could take weeks to resume safely, and Israel's stance on Lebanon adds uncertainty. The European Parliament votes today on the Turnberry trade deal with the US, expected to pass with a clear majority. The German ZEW sentiment survey is due this morning. At the G7 in Evian-les-Bains, Macron said he expects a deal on rare earths and critical minerals. Base Metals Aluminium remains the standout story, closing Monday at $3,358 — down 5% on the day and its steepest intraday fall in four years — as the US-Iran deal raised hopes for resumed Gulf exports through the Strait of Hormuz. Gulf smelters account for roughly 9% of global supply. The 50-day and 100-day moving averages have both been breached. Citi recommended buying the dip. Separately, Alcoa ratified a four-year labour agreement covering 965 workers at its Warrick and Massena US smelters, securing operational stability. In the scrap market, Make UK warned that soaring UK aluminium scrap exports — up 43% since 2016 to 624,000 tonnes — threaten domestic supply chains for defence and automotive. The European Commission is also working on measures to curb scrap leaving the bloc. Copper pared Monday's gains after touching a one-week high of $13,893.50, weighed by weak Chinese data and lingering Middle East uncertainty. China's aluminium output rose 1.7% year-on-year in May to 3.89 million tonnes. Precious Metals Gold edged up 0.4% to $4,323 in Asian trade, extending a four-session winning streak as the peace deal continues to ease rate-hike fears. Citi raised its 0–3 month gold forecast by $500 to $4,500/oz. A record 45% of central bank reserve managers surveyed by the World Gold Council plan to increase gold holdings over the next 12 months. Silver slipped 0.4% to $69.76, platinum lost 0.3% to $1,762, and palladium fell 1.2% to $1,332 after Monday's sharp rally. Steel China's crude steel output in May fell 2.7% year-on-year to 84.36 million tonnes — the lowest May figure since 2018 — as Beijing's overcapacity crackdown bites, though month-on-month output edged up 0.9% on improved margins. CISA's deputy secretary-general said Chinese steel demand will edge lower this year and warned the EU's CBAM will drive up costs for Chinese steel exports. Rio Tinto expects India and ASEAN demand to offset Chinese stagnation over the coming decade. Tata Steel UK said it remains confident in supply continuity following the Port Talbot cold mill fire earlier this month, with the wider EAF project unaffected. Rare Earth Metals Critical minerals are a key agenda item at the G7 summit in Evian-les-Bains, with Macron saying he expects a deal. However, the Trump administration's push for a Pentagon AI-derived pricing model for a Western trading bloc is meeting resistance from European allies concerned about US governance dominance. Washington aims to present binding bilateral proposals to the EU and Japan before month-end, covering 5–10 minerals including heavy rare earths, antimony, graphite and tungsten. Sweden's LKAB received environmental approval for its fossil-free sponge iron plant and apatite extraction facility, from which rare earths can be recovered. Forex The euro held near $1.16, close to its weekly high of $1.1617 reached Monday, as the dollar index traded flat around 99.75 in a tight range. Sterling was steady near $1.342 ahead of Thursday's BoE decision (hold expected at 3.75%) and UK inflation data. The yen was unmoved by the BOJ hike, flat at 160.31. For European scrap traders, the softer dollar environment since the peace deal makes dollar-denominated metals marginally cheaper in euro terms, though the move has been modest — EUR/USD is up roughly 1% from its early-June lows near $1.1510. Watch Today The FOMC begins its two-day meeting — the decision and Warsh's press conference land tomorrow at 20:30 CET. The German ZEW sentiment survey is due at 11:00 CET and could reflect the peace-deal optimism. The European Parliament votes on the Turnberry EU-US trade deal. US housing starts and import prices are released at 14:30 CET. BOJ Deputy Governor Uchida's press conference (filling in for the hospitalised Ueda) may offer further guidance on Japan's rate path.