Metals Daily

This MorningCopper and zinc both lifted more than 0.5% on this Tuesday morning. Aluminium, nickel and tin all remained pretty much unchanged overnight. Only lead dipped a little bit so far.What's Moving Markets?Global equities rallied, as traders hope the new US tariffs set to take effect on 2 Apr could be softer and more targeted than initially anticipated. Reports emerged that President Donald Trump’s coming wave of tariffs is poised to be more targeted than the barrage he has occasionally threatened. Metals struggled amid uncertainty over the economic outlook. Energy markets remained gripped by rising geopolitical tensions.. Yields on 10-year US Treasuries were 8bp higher at 4.34%, while the USD index was 0.2% stronger at 104.3.A Bloomberg report suggested the Chinese government is planning to purchase metals such as cobalt, copper, nickel, and lithium. Earlier this year, the National Development & Reform Commission (NDRC), which manages strategic reserves, said the country would move faster to fulfil the yearly task of stockpiling strategic goods. Any efforts to boost reserves could be hindered by renewed supply side issues. The Democratic Republic of Congo recently banned exports of cobalt for four months, which could leave a 55kt hole in the global market. Copper processing fees are near record-low levels due to tightness in the copper concentrates market.Precious metals succumbed to profit-taking but were supported by safe-haven demand amid economic and geopolitical uncertainties, as well as expectations of Fed rate cuts. Tensions in the Middle East escalated as Israel resumed strikes targeting Hamas in the Gaza Strip. Meanwhile, US delegates are scheduled to meet with Russian officials to seek a ceasefire in the Black Sea and broader peace in the Ukraine war, following discussions with Ukrainian diplomats. Global gold ETFs saw net inflows of $3bn (~31t) last week - the eighth consecutive week of inflows. North America accounted for almost all of these inflows. On a YTD basis, net inflows now total over $19bn (~207t) - on course to be the strongest Q1 since 2022. COT data on commodities covering managed money activities in the week to 18 Mar showed another week of net selling across energy and grains, while precious and industrial metals saw strong demand. Fresh longs were added in gold, silver, and platinum but made these contracts exposed to end-of-week profit-taking.Base metals ended mixed, but copper moved higher driven by tariff concerns and supply side factors. Mercuria warned that there is 500kt of copper heading to the US. This compares with normal imports of around 70kt per month. The shift in inventory could leave the rest of the global market tight in the face of stronger demand in China. Copper concentrates TC/RCs are collapsing amid aggressive purchasing numbers from trade and smelters. TCs hit -$35/t. The copper net long jumped 64% on fresh longs and short covering. The world refined copper balance, based on Chinese apparent usage (excluding changes in bonded/unreported stocks), was in a 19kt deficit in Jan, the ICSG said, vs a 24kt deficit a year ago. Adjusted for estimated changes in Chinese bonded stocks, the deficit was 17kt.Iron ore was weaker in response to signs of ongoing weakness in China’s steel industry - the prices of futures for steel rebar, used in construction, hit a six-month low.