MORNING VIEW: Base metals prices mixed despite generally healthy Chinese economic data

Base metals prices on both the London Metal Exchange and Shanghai Futures Exchange were mixed this morning, Tuesday December 15, this despite some healthy Chinese economic data.

  • Stricter lockdowns measures in many countries are a headwind for equity markets, which may flow into the metals
  • With gold prices up and US treasury yields down, this suggests a pick-up in haven demand


Base metals

The three-month base metals prices on the LME were mainly weaker. Nickel bucked the trend with a 0.1% gain to $17,660 per tonne, while the rest were down by an average of 0.4%, with copper off by 0.2% at $7,761 per tonne.

Traded volume has been average with 6,085 lots traded as of 6.40am London time, compared with 9,929 lots at a similar time on Monday.

The most-traded base metals contracts on the SHFE were split with the January aluminium and lead contracts off by 0.5% and 1.8% respectively, January copper down by just 10 yuan per tonne at 57,690 yuan ($8,813) per tonne, and the rest up by an average of 0.5%.

Precious metals
Spot gold prices were firmer, up by 0.8% at $1,841.88 per oz, while silver ($24.19 per oz) was up by 1.5% and palladium ($2,317.50 per oz) and platinum ($1,014.50 per oz) were both up by 0.8%.

Wider markets

The yield on US 10-year treasuries was recently quoted at 0.89%, down from 0.91% at a similar time on Monday.

Asia-Pacific equities were mainly weaker this morning: the ASX 200 (-0.43%), the Nikkei (-0.17%), the Hang Seng (-0.6%) and the Kospi (-0.19%), while the CSI was up by 0.26%.

Currencies
The US dollar index remains in low ground and was recently quoted at 90.71, this after setting a fresh multi-month low on Monday at 90.42.

Most of the other major currencies were holding up in high ground, albeit below recent highs: the euro (1.2143), the Australian dollar (0.7520), the yen (104.06) and sterling (1.3333).

Key data
Key economic data already out on Tuesday showed China’s fixed asset investment grew by 2.6% in the year to date, compared with the same period last year, up from 1.8% in the year to October. Other Chinese releases showed industrial production climbed by 7% year on year in November, after 6.9% growth in October; retail sales grew by 5% year on year in November, compared with 4.3% in October; the unemployment rate dropped to 5.2% from 5.3% and foreign direct investment grew by 6.3% in the year to date, down from 6.4% in the year to October.

Data out later includes data on UK employment, French consumer prices, Italy’s trade balance as well as US data on Empire State manufacturing, import prices, capacity utilization, industrial production and Treasury International Capital long-term purchases.

Today’s key themes and views
Once again most of the metals’ rallies have paused, with lead the main metal moving lower and nickel still rallying. We have been here before where the metals have lost upward momentum and have looked tired, only to see them go on to extend gains later after a rest.

At some stage this pattern is likely to break, but given the strength of the trend and the bullish longer-term implications of all the infrastructure spending, it is foolhardy to try to call a top and as such it is probably best to wait and let the market show its hand.

Gold’s rebound off the late-November low ran out of steam, but prices have found support and are attempting another rebound. Also, while prices are back above $1,840 per oz, they are looking less vulnerable. But unless sentiment in broader markets deteriorates, we still feel gold may struggle on the upside. For now, we would be bearish gold below $1,840 per oz and bullish above $1,880 per oz.


What to read next
The publication of Fastmarkets’ molybdenum drummed molybdic oxide – in-whs Busan, MB-FEO-0004, and in-whs Rotterdam, MB-FEO-0003 – and ferro-molybdenum 65% Mo min, in-whs Rotterdam, MB-FEO-0001, price assessments were delayed because of slow data processing on Friday May 23. Fastmarkets’ pricing database has been updated. The publication of these prices was delayed for 12 minutes. The […]
This price assessment aims to enhance transparency in the Indonesian coke market. Fastmarkets has observed a significant volume of Indonesian coke entering the global market in recent months, establishing Indonesia as a key exporter of coke worldwide since 2023. In the first seven months of 2024, Poland, China and Indonesia were the top three coke exporters globally.  […]
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
Read Fastmarkets' monthly base metals market for May 2025 focusing on raw materials including copper, nickel aluminium, lead, zinc and tin.
The MB-AL-0408 aluminium low-carbon differential P1020A, cif Mexico was published at 3:02pm London time on May 20 instead of the scheduled time of 3-4pm on May 27. The erroneous price has been removed from Fastmarkets’ pricing database. The price will next be published on May 27 at its usual time. This price is a part of the Fastmarkets […]
Brazil could reach a share of as much as 7 million tonnes per year in China's distillers dried grains (DDG) and distillers dried grains with soluble (DDGS) markets following an agreement between the two countries that allows Brazilian exports, according to the National Union of Corn Ethanol (Unem).