Metals Daily

This Morning At around 07:45 CEST, all six base metals were above Thursday’s official close. Tin led, up 1.3% at $56,500 a tonne, followed by lead and copper, both 0.7% higher at $1,850 and $14,198 respectively. Zinc gained 0.4% to $3,779.50, while aluminium and nickel each added 0.2%, trading at $3,265 and $16,595. The broad advance left the complex firmer ahead of potentially market-moving U.S. employment data. Macro & Geopolitics Markets entered the European morning cautiously ahead of July’s U.S. payrolls report, with 80,000 new jobs expected and unemployment forecast at 4.2%. Interest-rate futures assigned roughly a 54% probability to a Federal Reserve rate increase in September, making metals vulnerable to a sharp move in yields and the dollar. Geopolitical risk was also feeding inflation concerns: Brent rose 1.5% to $83.78 after an overnight jump of 3.8%, as tensions involving Yemen’s Houthis, Saudi Arabia and the Strait of Hormuz weighed on sentiment. Iran was reviewing a proposal to bar U.S., Israeli and other vessels it considers hostile from transiting the strait. European equities were indicated 0.2% lower, while resilient Chinese exports provided a limited counterweight to the risk-off tone. Base Metals Copper remained near a six-month high after the Democratic Republic of Congo prohibited exports of copper and cobalt concentrates, reinforcing concerns about low inventories, tight concentrate supply and mine disruptions. The immediate impact on refined-metal supply may be modest because Congo predominantly exports copper cathode, but the announcement strengthened bullish sentiment. Chinese July unwrought copper imports fell 11.5% year on year, while imports of copper ore and concentrates declined 7.1%. Aluminium faced a more ample export backdrop after Chinese exports of unwrought aluminium and aluminium products rose 16.7% in the first seven months of the year. Nickel rebounded despite additional Indonesian ore quotas, while zinc, lead and tin followed the broader complex higher. Precious Metals Gold gained 0.6% to about $4,262 an ounce and was heading for its strongest week since January, supported by haven demand and shifting expectations for U.S. monetary policy. Silver advanced 1.3% to $62.27, while platinum added 0.5% to $1,737. Palladium lagged, easing 0.2% to $1,368. The U.S. payroll release was the immediate test: weaker employment could pressure yields and support bullion, while a strong reading might revive rate-hike expectations. Steel China exported 10.12 million tonnes of steel products in July, down 1.9% from June but 3% higher year on year. January-July exports fell 4.4% to about 65 million tonnes, indicating that overseas volumes remained substantial despite slower buying following second-quarter restocking. Domestic production economics weakened, with only about one-third of mills profitable by late July. In Germany, Thyssenkrupp shareholders were due to vote on spinning off 49% of tk accelis, the group’s materials trading division. A separate listing could follow at the end of October, with Thyssenkrupp retaining a majority stake. Rare Earth Metals China’s rare-earth exports fell to a four-month low of 4,224 tonnes in July, down 17.3% from June and 29.5% from a year earlier, as overseas demand slowed after stockbuilding in the second quarter. January-July shipments were down 10% year on year, keeping supply-chain diversification firmly on the agenda. U.S. producer MP Materials reported a nearly fourfold increase in quarterly revenue from processed rare-earth materials, to $94.4 million, and received $17.6 million in price-protection income from the U.S. government. The developments highlighted the growing role of state support in non-Chinese supply and could sustain premiums for traceable material outside China. Forex The dollar steadied in Asian trade after strengthening on Thursday as oil-driven inflation concerns pushed U.S. yields higher. The euro had slipped to around $1.152 during Thursday’s U.S. session, increasing euro-denominated replacement costs for internationally priced metals. Dollar-yen traded near 158.4, with the Japanese currency surrendering part of its gains following last week’s intervention by Japan and the United States. For European scrap traders, the payroll result could be decisive: a stronger dollar would amplify LME gains in euro terms, while a softer employment reading could offer some currency relief. Watch Today U.S. non-farm payrolls, unemployment and wage data were due at 14:30 CEST and represented the main scheduled risk for metals, currencies and interest-rate expectations. German industrial production and trade figures, alongside French trade data, were due earlier in the European session. Thyssenkrupp’s extraordinary shareholder meeting was also being watched for approval of the tk accelis spin-off.