metals daily (EN)

This MorningZinc gained almost 2% on this Monday morning. Nickel is showing a plus of around 1.5%. Aluminium, lead an tin all lifted a bit. Only copper lost a bit.What’s Moving Markets?Global equities closed higher, fuelled by growing expectations of a larger interest rate cut at the Fed's meeting this week. Investors are increasingly betting on a 50bp rate cut by the Fed, with the probability jumping to 47% from 15% earlier in the week, driven by recent inflation and jobs data. A risk-on tone across markets helped boost sentiment across the commodity complex. Weak labour data pushed gold to record highs. Yields on 10-year US Treasuries fell last week by 6bp to 3.66%, while the USD index was slightly weaker at 101.1.

China's economic recovery continues to face significant challenges, amid persistently feeble domestic demand and increasing external pressures, the National Statistics Agency said in a statement. The remarks followed weak activity data in Aug, marked by the slowest industrial production growth in five months and updates for retail sales that missed market estimates, partly due to heatwaves and torrential rains. Meanwhile, the urban surveyed unemployment rate hit a six-month high of 5.3% in Aug. Elsewhere, fixed asset investment grew by 3.4% from the prior year in the Jan to Aug period, compared to a 3.6% increase over the first seven months and below the 3.5% rise expected by economists. Saturday's figures contrasted with strong export readings last month, highlighting the uneven nature of China's economic recovery and adding more pressure on policymakers to introduce more stimulus measures to achieve the official growth target of around 5% this year.

Precious metals were boosted by falling bond yields and a weaker USD amid expectations of the start of a Fed rate cutting cycle. Spot gold traded to another all-time-high following the ECB's rate cut and US PPI data. Silver continues to struggle above $30 but with gold and copper on the move and the USD trading softer it may find the momentum needed to clear resistance. The gold: silver ratio points in that direction, now trading around 85.5 having made a double top at 90. The PGMs are out-performing. Platinum has broken several key technical levels, thereby forcing wrong-footed short sellers to run for cover. In the week to 3 Sep, speculators increased their gross short by 11k to 36k contracts (1.8moz), leaving a net short of 10.8k. Palladium gained from a short-covering rally after Russian President Vladimir Putin said that Moscow should consider limiting exports of uranium, titanium and nickel in retaliation against the West.

Base metals ended the week with gains (LMEX +4.3% w-o-w), as a risk-on tone boosted sentiment across the whole sector. A more positive macro picture and rate cuts by central banks has improved risk appetite. Aluminium extended recent gains amid further signs of a recovery in demand in China, reflected in falling inventories. Meanwhile, a slightly bearish tone for aluminium demand in the short-term was evident at Fastmarkets Aluminium Conference in Athens. Increasing raw material costs raised the prospect of weaker refined metal output. Prices for alumina have spiked 50% this year to their highest level since Mar 2022. Primary aluminium has upside for both demand and prices in 2025, amid low stocks and supply tightness. Total open-tonnage stocks in LME-registered warehouses rose by 6.0% to 1,137,907t at the end of Aug, from 1,073,574 at the end of Jul, according to the latest data released by the exchange. Copper stocks rose 29% to 295,300t in Aug; aluminium stocks were broadly unchanged; nickel stocks rose by 6.7% to 110,388t; while zinc stocks rose 2.6% to 217,575t. Cancelled copper stocks have increased to 36,600t, up 44% since the start of Sep.

Iron ore was steady but remained around the $90 mark. The country’s main steel industry group advised mills should be cautious boosting output too quickly due to lacklustre demand. Steel mills battled weak margins and high inventories. The economy is also grappling with burgeoning inventory, in that there are 382mn square metres of unsold new homes as of Jul. Brazilian miner Vale expects that by 2030 some 10% of its iron ore output will come from the reuse of mine waste known as tailings, an executive told Reuters, reducing the amount of potentially dangerous material still stored in dams.