METALS MORNING VIEW 25/07: Metals prices stronger on good volume

Base metals prices on the London Metal Exchange are up by an average of 0.5% this morning, Tuesday July 25. Tin is once again bucking the trend with prices off 0.3% at $20,190 per tonne, while the rest have gains of between 0.3% for aluminium and 0.9% for nickel and copper, with the latter at $6,088 per tonne basis three months.

Volume has been high with 10,533 lots traded as of 06:35 BST – the combination of high volume and prices gains bodes well. This comes after a bullish day on Monday when the base metals complex closed up an average of 0.8%, with aluminium the only metal to close weaker with a 0.2% dip to $1,912.50 per tonne.

Gold and silver prices are little changed this morning, with spot gold prices at $1,255.60 per oz and silver at $16.46 per oz, while the PGMs are looking stronger with gains of 0.6%. This comes after a quiet day on Monday for bullion, while platinum prices dropped 0.5% and palladium prices gained 0.7%.

Metals prices on the Shanghai Futures Exchange (SHFE) are up across the board with gains averaging 1.1%, led by a 2.6% rise in nickel prices, with zinc prices up 1.2% and copper prices up 1.1% at 48,440 yuan ($7,176) per tonne. Spot copper prices in Changjiang are up 1.3% at 48,060-48,360 yuan per tonne and the LME/Shanghai copper arb ratio is weaker at 7.96.

In other metals in China, September iron ore prices on the Dalian Commodity Exchange are up 3.3% at 527 yuan per tonne and on the SHFE, steel rebar prices are up 1.8%, but gold and silver prices are off 0.1% and 0.2% respectively.

In international markets, spot Brent crude oil prices are up 0.5% at $48.88 per barrel, the yield on US ten-year treasuries is steady at 2.25% and the German ten-year bund yield has eased to 0.50%.

Equities were mixed on Monday with the Euro Stoxx 50 little changed and the Dow closing off 0.3% at 21,513.178. Asian markets are similarly mixed, the ASX 200 is up 0.7%, the Nikkei and Hang Seng are little changed and the CSI 300 and Kospi are off 0.5%.

The dollar index continues to fall, it was recently quoted at 93.82, the euro is strong at 1.1665, sterling is firm at 1.3039, the yen is strong at 110.89 and the Australian dollar is stronger too at 0.7943. The yuan is also stronger at 6.7481 and the other emerging currencies we follow are little changed.

On the economic agenda today, German import prices dropped 1.1%, which was worse than the 0.7% decline expected, later there is data out of German Ifo business climate, UK CBI industrial order expectations, with US data including house prices, consumer confidence and Richmond manufacturing index. In addition, UK’s Monetary Policy Committee member Andrew Haldane is speaking.

The base metals are looking stronger and the run-up in good volume suggests a change in sentiment, especially as this is happening during the normally slower summer months. The second quarter was quiet when seasonally it is a busier time, so maybe we are witnessing a delayed busier time now, which is also being helped by the weaker dollar.

Gold’s rebound has found new energy on the combination of the weaker dollar, which we think stems from the weak political scene in Washington and from the less hawkish US Federal Reserve stance. Silver and the PGM prices are following gold’s lead.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

What to read next
Read more from senior analyst Andy Farida on how the price action in LME nickel has played out in the first half of 2024
Tight aluminium scrap availability, the increase in container costs, sluggish demand in the US and the US market’s current indifference to rising premiums in Europe and Asia were the top subjects discussed during the Harbor Aluminum Summit that took place in Chicago on June 4-6
Germany-based copper recycling and non-ferrous metal provider Aurubis has started commissioning their secondary smelter in Augusta, Georgia, and could eventually introduce black mass recycling to the facility
Base metals on the London Metal Exchange were mixed in morning trading on Monday June 10, with three-month prices lacking direction amid thin traded volumes due a public holiday in China, the largest market for base metals
Copper concentrate treatment and refining charges have repeatedly fallen to record-low levels over the first five months of 2024
The publication of Fastmarkets’ assessments for the nickel briquette premium, delivered Midwest US and the nickel 4x4 cathode premium, delivered Midwest US for June 4 were delayed because of incorrect methodology application.