Metals Daily

This Morning LME base metals are mixed this Tuesday morning. Aluminium is the standout performer, with cash up 1.9% (+$63) versus Monday's official close to $3,527, extending its war-driven supply-squeeze rally. Tin cash is up 0.4% (+$196) to $46,765. On the downside, nickel cash has slipped 0.9% (−$146) to $16,915, while copper cash eased 0.3% (−$34) to $12,107. Lead edged up 0.4% and zinc dipped 0.3%, both showing minimal movement. The aluminium backwardation continues to deepen, with cash now trading at a $63 premium to three-month — a signal of acute physical tightness. Macro & Geopolitics Markets are catching a modest risk-on bid this morning after the Wall Street Journal reported that President Trump told aides he is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed. Brent crude pared gains to around $115, though it remains on track for a record monthly rise of roughly 59%. The Fed has signalled patience, with Chair Powell saying the central bank can "wait and see" how the war affects inflation — rate cuts are now fully priced out for 2026. German inflation accelerated in March on surging energy costs, and euro zone flash CPI data due today will be closely watched for further evidence of pass-through. EU energy ministers meet today to coordinate their response to the oil and gas disruption. Money markets now price three ECB rate hikes by year-end — a dramatic reversal from pre-war expectations of steady rates. Base Metals Iranian strikes over the weekend damaged plants at Aluminium Bahrain (Alba) and Emirates Global Aluminium (EGA), which together account for roughly 8% of global capacity. Alba had already idled 19% of its smelting lines due to the Hormuz closure, and EGA reported "significant damage" at Al Taweelah. LME warehouse stocks have fallen over 60% since May to 418,675 tonnes, and the cash premium over three-month hit its highest since 2007. Copper remains under pressure despite a softer dollar; LME stocks at 359,275 tonnes and a contango weigh on sentiment. China's March manufacturing PMI rebounded to 50.4 from 39.0, providing some demand-side support across the complex. Tin led gains in Shanghai overnight, up 1.6%. Precious Metals Gold is up over 2% to around $4,609 in early trading, buoyed by the softer dollar and ceasefire hopes, but remains on track for its worst month since October 2008 with a decline exceeding 13% in March. Traders have priced out all Fed rate cuts for 2026, removing a key pillar of support. Goldman Sachs still targets $5,400 by year-end on central bank buying. Silver surged nearly 5% to $73.47, platinum breached $1,960 (+3%), and palladium jumped over 3% to $1,451. Steel China's green steel transition is lagging Beijing's targets. A CREA report found that electric arc furnace output is projected to reach only 12.4% of total production by 2030, well below the 20% policy goal. Coal-powered blast furnace steelmaking continues to dominate, with excess capacity persisting. China's steel exports hit a record 119 million tonnes in 2025. Separately, the UK government is reportedly on the verge of full nationalisation of British Steel. Rare Earth Metals Japan's Mitsubishi Materials agreed to acquire a stake in U.S.-based ReElement Technologies, a rare earth recycling firm, to accelerate secondary smelting and participate in the U.S. rare earth supply chain via offtake and tolling agreements. St George Mining announced a strategic European alliance for rare earths processing. These moves reflect the intensifying global push to diversify critical mineral supply chains away from China, particularly following the U.S.-Japan action plan on critical minerals announced during PM Takaichi's Washington visit. Forex The dollar is headed for its strongest monthly gain since July, benefiting from safe-haven flows and the U.S.'s status as a net energy exporter. The dollar index is near a 10-month high around 100.5. The euro, last at $1.1474, is set for a nearly 3% monthly loss as Europe's energy import dependence weighs heavily. Sterling is down over 2% in March. The yen remains pinned near 160 per dollar despite stepped-up Japanese intervention warnings; Tokyo intervened at this level in July 2024. For European scrap traders, the weaker euro against the dollar raises the cost of dollar-denominated metal imports. Watch Today Euro zone flash inflation data for March (09:00 GMT) will be the key release for European markets — any upside surprise could accelerate ECB hike expectations. UK Q4 GDP and German unemployment data are also due. EU energy ministers hold emergency talks on the oil and gas market disruption. In the U.S., consumer confidence and JOLTS job openings data land this afternoon, alongside speeches from multiple Fed officials including Goolsbee, Schmid, and Bowman.