MORNING VIEW: Base metals prices mixed, with downside bias; broader markets under pressure

Base metals prices on the London Metal Exchange and Shanghai Futures Exchange were for the most part weaker this morning, Friday January 29, with aluminium bucking the trend on both exchanges and March tin on the SHFE also higher.

  • Asian-Pacific equities and major western pre-market equity index futures were weaker this morning
  • Overall the base metals are looking heavy

Base metals
Three-month aluminium prices on the LME were up by 0.1% this morning, the rest of the complex was down by an average of 1%, led by a 1.3% fall in nickel ($17,580 per tonne) and a 1.1% fall in copper ($7,814 per tonne). Zinc, lead and tin were all down by around 0.8%

The most-traded base metals contracts on the SHFE were split with the March contracts of aluminium and tin up by 1.3% and 0.3% respectively, while the rest were down by an average of 0.9%, led by a 1.7% fall in March lead, while copper was down by 0.8% at 57,550 yuan ($8,898) per tonne.

Precious metals
Spot gold ($1,845.81 per oz) was up by 0.1% and silver ($26.45 per oz) was down by 0.1%, while platinum ($1,080 per oz) and palladium ($2,348.50 per oz) were up 0.4% and 0.2% respectively.

Wider markets
Despite nervousness in broader markets, the yield on US 10-year treasuries has climbed to 1.05% this morning, up from 1.01% at a similar time on Thursday – the recent high was at 1.18%.

Asian-Pacific equities were down across the board this morning: the Hang Seng (-0.64%), the Kospi (-3.03%), the ASX 200 (-0.64%), the CSI (-0.47%) and the Nikkei (-1.89%).

Currencies
The US Dollar Index seems to be putting in an inverse head-and-shoulder pattern on the charts, which is potentially bullish. It was recently quoted at 90.68, with resistance between 90.89 and 91.02.

Most of the other major currencies were consolidating this morning: the euro (1.2111), the Australian dollar (0.7655) and sterling (1.3684); the exception was the yen (104.56) that was weakening.

Key data
Friday has a busy economic agenda. Data already out showed Japan’s housing starts fell by 9% year on year in December, after a 3.7% fall in November, and a consumer confidence reading in the country read 29.6, after 31.8 previously. French consumer spending climbed by 23% month on month in December, after an 18% fall in November, and the country’s flash reading of fourth-quarter gross domestic product (GDP) fell by 1.3%, after an 18.7% rise in the third quarter. German import prices rose by 0.6% month on month in December after a 0.5% rise in November.

Data out later includes Spanish consumer price index and GDP, German unemployment change and GDP, EU M3 money supply and private loans.

US releases include data on personal income, spending and personal consumption, employment cost index, the Chicago purchasing managers’ index, pending home sales and readings from the University of Michigan on consumer sentiment and inflation expectations.

Today’s key themes and views
With the exception of tin that remains in high ground, the rest of the base metals seem to be rolling over to the downside and if the dollar does strengthen further that might weigh on prices more.

We have been expecting a countertrend move, one seems to be getting underway now and we should get a feel for how strong underlying bullish sentiment is by seeing how far any pullback goes and how long it lasts. Overall, we remain long-term bullish toward the base metals on account of expecting more infrastructure spending, but a correction could be quite a constructive development after such long rallies.

Gold prices continue to consolidate, but prices are still above the $1,820 per oz level – in recent weeks we have seen dip-buying emerge below that level. If a broader sell-off does unfold then we would not be surprised to see gold prices initially weaken while investors dash-for-cash, before later strengthening after realized cash is then put into havens.


What to read next
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]
To increase the transparency of our methodology, Fastmarkets clarifies that the quotation period of the MHP nickel payable indicator is the month of delivery, or the month M. Any data points Fastmarkets received otherwise will be normalized to the M month based on the monthly spreads of the prevailing exchange-traded Class-1 nickel reference price, or […]
'Probably miscalculated’ assumptions at Kakula mine force Ivanhoe to overhaul entire Kamoa-Kakula complex, explains CEO Marna Cloete.
Tariff concerns and opaque import regulations dominated discussions among aluminium and copper scrap market participants at the 2025 ASEAN Recycling Metals International Conference held in Thailand on June 18-20.