Daily metals

LME base metals continue their slide in early trading, with tin leading losses at a sharp -3.7%. Aluminium follows at -1.0%, while zinc and nickel are down -0.8% and -0.7% respectively. Copper posts a more modest decline of -0.4%. Lead is essentially flat. The broad-based weakness confirms yesterday's bearish momentum, with tin's steep drop particularly notable amid thin liquidity conditions. Commodities slide sharply, led by base and precious metals Copper, gold and silver fell on easing geopolitical tensions between the U.S. and China, plus scheduled U.S.–Iran talks, which dampened risk premiums. A firmer U.S. dollar contributed to the decline by making dollar-priced metals more expensive for foreign buyers. Metals volatility is being amplified by thin liquidity and cautious sentiment, now compounded by expectations of a hawkish Federal Reserve stance, which increases the opportunity cost of holding non-yielding assets like gold and silver. Background: Last Friday (January 30), silver plunged approximately 30% in its worst single-day drop since 1980, triggered by President Trump's nomination of Kevin Warsh as Fed Chair. The metal has since partially recovered but remains well below its recent highs above $120 per ounce. Market implications for base metals: Copper's recent correction may extend if risk-off positioning persists and if inventories rise. Downward pressure on aluminium, nickel, zinc, and tin could continue alongside broader commodity weakness — with this morning's tin plunge of nearly 4% underscoring the vulnerability of the complex. Strategic Policy Shifts: Critical Minerals and Rare Earths Yesterday: U.S. Vice President JD Vance announced plans for a critical minerals trade bloc at a State Department meeting hosted by Secretary of State Marco Rubio, attended by representatives from 55 countries including South Korea, India, Thailand, Japan, Germany, Australia, and the Democratic Republic of Congo. The bloc aims to cover two-thirds of the global economy and will use coordinated price floors maintained through adjustable tariffs to counter China's market dominance. Earlier this week: On Monday, President Trump launched Project Vault, a strategic stockpile of critical minerals backed by $10 billion in seed funding from the U.S. Export-Import Bank and $2 billion in private capital. The initiative comes after China — which controls approximately 70% of the world's rare earths mining and 90% of processing — restricted exports during last year's trade war. Market implications: Rare earth price volatility could rise as geopolitical and trade policy uncertainty increases — positive for prices if supply security concerns intensify. If price floors are implemented, downward price shocks may be limited, but production costs and inflation risks for downstream users may rise. Notably, shares of critical minerals companies fell on yesterday's news, with MP Materials down 2.8% and USA Rare Earth losing 6.6%. Rare Earth Supply Developments Earlier this week: Japan achieved a technical milestone in rare earth supply diversification. On February 1, the deep-sea drilling vessel Chikyu successfully retrieved rare earth-rich seabed sediments at a depth of approximately 6,000 meters near the island of Minamitorishima — a world first. The Japanese government announced the achievement on Monday. Market implications: This signals emerging alternative supply routes for critical elements — potentially bullish over the medium term if economically viable extraction comes into view. Rare earth sentiment remains sensitive to supply diversification news, especially for NdPr and heavy rare earth components. Currency and Macro Drivers Commodity markets remain highly responsive to currency swings. Recent commodity selloffs have coincided with USD strength — which historically pressures dollar-priced metals like copper and gold. Rare Earth Price Signals Background: Independent pricing data reveals strong rare earth momentum particularly in NdPr oxide. Earlier this week, BMI (a Fitch Solutions company) raised its 2026 average annual price forecast to $90,000 per tonne, citing a robust start to the year and tightening fundamentals. NdPr oxide reached $97,969 per tonne on January 15 and climbed further to $99,935 per tonne by January 27. This suggests rare earth pricing strength is less short-term speculative and more structurally driven by supply constraints, energy transition demand, and China's core role.