Daily metals

Base metals are extending losses in early Thursday trading as the Middle East conflict escalates sharply overnight. Copper trades at $13,400, down 0.5% from Wednesday's official close of $13,466.23. Aluminium bucks the trend at $3,483.5, up 0.5% from $3,466, supported by supply-side concerns around Middle East smelting capacity. Nickel is marginally lower at $17,375, off 0.4% from $17,443.60. Lead edges up 0.5% to $1,973 versus $1,962.50. Tin rises 0.2% to $51,700 from $51,575. Zinc slips 0.7% to $3,450 against $3,474.23. The overnight escalation in U.S.-Iran hostilities is the dominant driver across the complex. Macro & Geopolitics The U.S.-Iran conflict has taken a dangerous turn. Washington launched fresh strikes on multiple Iranian targets overnight, and Iran's IRGC declared the Strait of Hormuz closed to all vessels, threatening to target any ship attempting passage — though U.S. Central Command denied the strait was shut. Brent crude surged to around $94.60, up 1.7%. Wednesday's U.S. CPI came in at 4.2% year-on-year, the fastest pace in three years, in line with consensus but reinforcing hawkish Fed expectations — markets now price a 51.6% probability of a rate hike at the October meeting. The ECB announces its rate decision at 12:15 GMT today, with a 25 basis point hike widely expected. The accompanying press conference and staff projections will be closely watched for signals on further tightening. European equity futures opened sharply lower, with DAX futures off 0.6% and FTSE futures down 0.8%. Base Metals Copper touched a fresh three-week low of $13,378 in Asian trade before stabilising, weighed by the growth-negative implications of surging oil prices. LME copper stocks fell to 369,975 tonnes on Wednesday — the lowest since April 1 — with cancelled warrants at 38% of total, the highest ratio since December, signalling persistent physical tightness. Aluminium found a bid from the energy-supply angle: the Middle East houses 9% of global smelting capacity, and LME aluminium stocks remain at multi-year lows with Russian-origin metal comprising 93% of available inventory in May. Andy Home's Reuters column flagged nickel's slow rebalancing — combined LME/ShFE stocks stand at 468,600 tonnes, the highest since 2015, even as Western supply absorbs hits from the Ambatovy cyclone shutdown and Sherritt's Cuba sanctions-related feed shortage. Novelis restarted its fire-damaged Oswego, New York aluminium plant, a key supplier for Ford's F-150 line. Precious Metals Gold plunged to a six-month low of $4,022 in early Asian trade before rebounding on short-covering to around $4,077. The metal has now shed more than 20% since the war began in late February, caught in a cycle where conflict-driven oil prices stoke inflation fears and rate-hike bets that weigh on the non-yielding asset. StoneX analyst Matt Simpson noted $4,000 as an obvious support level that could tempt sidelined bulls. Silver traded near $63.60, platinum held around $1,664, and palladium outperformed with a 2.3% bounce to $1,242. Today's U.S. PPI data is the next catalyst. Steel South Korean President Lee pressed the EU at a Brussels summit to ensure Korean steelmakers receive terms no less favourable than competitors under the new EU steel safeguard regime taking effect 1 July. Korea shipped 3.3 million tonnes of finished steel to the EU in 2024, making it the bloc's second-largest supplier. Separately, the UK is consulting industry on possible modifications to its own July 1 steel tariff plan after downstream users warned of heavy cost impacts. Thyssenkrupp completed the sale of its remaining 15% stake in Italian stainless steel firm AST to Arvedi, and renamed its materials trading division "tk accelis" ahead of a potential spin-off, with CEO Ilse Henne flagging acquisition interest in the North American precious metals market. Rare Earth Metals China's throttling of indium phosphide export licences is emerging as a potent new materials chokepoint, with InP wafer prices surging 250% since restrictions began in February 2025. The compound is essential for photonics used in AI data centres, and China controls 70% of global indium output. Coherent is doubling InP wafer capacity at its Texas plant, but new capacity takes two to three years to come online. The restrictions illustrate Beijing's expanding toolkit beyond rare earths into upstream compounds and substrates critical to Western tech supply chains. Forex The euro edged up 0.1% to $1.1546 ahead of today's ECB decision, holding near recent lows. The dollar index is steady at 100.03, pinned at its strongest since the April ceasefire talks began, supported by safe-haven flows and hawkish Fed repricing. Sterling is flat at $1.338. USD/JPY remains above 160, with the yen under pressure despite Japanese wholesale inflation hitting a three-year high in May — BOJ hike expectations for 16 June and intervention risk remain elevated. Watch Today The ECB rate decision lands at 12:15 GMT, followed by Lagarde's press conference at 12:45 — the tone on further hikes and updated staff projections will set the near-term direction for the euro and European rate-sensitive assets. U.S. May PPI data at 12:30 GMT will be parsed for pipeline inflation signals after yesterday's hot CPI. Weekly U.S. jobless claims are also due. Wizz Air and Halma report results in London.