Metals Daily

This MorningNickel gained around 0.5% on this early Friday morning. Lead and zinc remained pretty much unchanged overnight, but copper, aluminium and tin all lost a bit. What's Moving Markets?Global equities fell, as investors reacted to Trump's latest automotive tariffs, which raised concerns over trade tensions and potential retaliation. Trump announced a 25% tariff on all foreign-made cars and light trucks, set to take effect on 2 Apr, and later warned of even higher tariffs on the EU and Canada if they take actions he deems harmful to the US Trump also indicated that tariffs on pharmaceuticals and lumber were imminent. Q4 GDP growth was revised slightly higher to 2.4% from 2.3%, while core PCE prices increased slightly less than previously estimated (2.6% vs. 2.7%). The changing geopolitical landscape continues to keep volatility high in commodity markets. Oil prices gained amid signs of stronger demand. Metals edged lower. Yields on 10-year US Treasuries were 2bp higher at 4.38%, while the USD index was 0.2% weaker at 104.3.The US is pushing for a sweeping new deal to control Ukraine’s critical minerals and energy assets, while offering Kyiv no security guarantees in return, in an aggressive expansion of its previous demands.The news from EV and cell producers out of China have been fast and furious of late, CATL's 1,000 km range vehicles with massive 140 kWh packs, now BYD's 5 min recharge vehicles that can add 2 km per second using their specialized chargers. For one, expect more of these "wow" announcements. But step back, what does this all mean for the supply chain? All of these announcements mean greater market share for EV's, and also bigger battery packs for each vehicle, multiplying material needs. Also needed are massive electric grid improvements, which need huge amounts of copper. This movement can already be seen with copper prices rising 15% YTD, while nickel, up 5.5%, Manganese up 20%, and cobalt up 37% have all been outstanding performers.Precious metals rallied amid tariff uncertainty and despite easing geopolitical tensions. Gold once again is challenging a record high ($3,057.50). This following another shallow correction that was arrested after strong demand emerged around the $3,000 level. Silver is having another go at resistance above $34.Profit-taking hit the base metals on tariff uncertainties. The 𝗖𝗠𝗘/𝗟𝗠𝗘 𝗰𝗼𝗽𝗽𝗲𝗿 arbitrage ballooned to record highs as the expected timeline for US tariffs on copper imports has been significantly tightened - from 9 months to a matter of weeks. While no specific rate is guaranteed, the risk has become very real for traders with metal already en route to the US or allocated for future shipments. Copper prices in London continue to decline as the arbitrage window to New York closes, driven by expectations of an imminent tariff announcement preventing more purchases to reach the US before tariffs are being introduced. Tin prices remain elevated amid supply disruptions and strong fund support. Despite indications that Wa authorities are preparing to lift the mining ban in Myanmar - combined with the recent suspension of operations at Bisie in DR Congo - around 16% of global mine supply is currently offline. Given these feedstock constraints, China's refined production will struggle to match last year's output in 2025, with a further tightening of the country's raw material supply anticipated in Q2. Positive semiconductor market momentum has continued into 2025, with global sales up 17.9% YoY in Jan. Meanwhile, LME stocks have dropped 36% in 2025 to just above 3,000 - the lowest level since Jun 2023 - and the LME cash/3-month spread is tightening from the wide contango seen at the end of last year.Iron ore remained steady as better economic data is offset by signs of weakness in the steel market. Chinese steel rebar prices have fallen more than 10% this year. This is despite the industry entering its normal seasonal peak, where warmer weather and the end of the Lunar New Year holiday drives increased construction activity.