Metals Daily

This MorningCopper, nickel and lead all gained around 0.5%. Aluminium, tin and zinc just lifted a little bit on this early Monday morning. What's Moving Markets?Global equities hovered in record territory as investors remained focused on corporate earnings and market updates. Markets were supported by strong US economic data, including robust retail sales and softer-than-expected core CPI and PPI figures, which offered some reassurance about the health of the US economy. Strong US economic data and a tighter than expected supply backdrop lifted cyclical commodity prices, while gold came under pressure due to a stronger USD. Yields on 10-year US Treasuries were up 1bp last week at 4.42%, while the USD index was 0.6% stronger at 98.5.This week, market attention will remain focused on trade developments and any potential agreements between the US and its key trading partners. The US earnings season will move into full swing, with major companies including Alphabet, Tesla, Verizon, Coca-Cola, T-Mobile, IBM set to report their quarterly results. On the economic front, key US data releases include flash S&P Global PMIs, durable goods orders, existing and new home sales.China's Q2 GDP beat forecasts again with a 5.2% YoY growth, driven by strong trade and industrial production. Yet sharper-than-expected slowdowns in fixed-asset investment and retail sales and falling property prices are a concern. The strength of the economy through H125 is certainly encouraging compared to the very downbeat expectations at the start of the year. Trade data benefited from frontloading in Q1 but generally held up better than expected in H125 as a whole. As a result, industrial production has outperformed. Nonetheless, H225 could prove to be more challenging. The tariff uncertainty will remain an overhang, with the next key deadlines coming up soon in Aug. As such, momentum could moderate in H225. However, the strength of H125 should nonetheless keep China on track to achieve its full year target of "around 5%" growth.The more industrial metals of the precious complex – silver and the PGMs – took up the running from flatlining gold. Elevated lease rates and OTC London backwardation highlight tight platinum market conditions, with above grounds stocks falling. Gold prices fell on the stronger USD and President Trump’s reassurance that he has no plans to remove Fed Chair Powell. Strong economic data suggest the Fed will not see a compelling reason for cutting interest rates in the upcoming meeting. Gold closed out H125 as one of the top-performing major asset classes, rising nearly 26% over the period.Base metals were rangebound. Copper’s price gains were limited, as some traders expect more supply will be available after the front loading ahead of the upcoming US tariffs of 50%. Inventories at LME are rising, especially in Asia and the US. China’s copper production hit a high of 1.3Mt in Jun, increasing by 10% YoY in H1, which dampened bullish sentiment. Tin prices have remained strong, averaging above $35,500 in Jul. Dwindling LME stocks, bullish investor positioning, and a tight concentrate market, especially in China, have supported prices. In an LSEG poll: Which metal do you think has the strongest upside potential in H225? Copper 53.6%; aluminium 14.3%; nickel 10.7%; zinc 10.7%; and tin 10.7%.Iron ore rose post $100/t for the first time since May on improving China growth sentiment. Optimism around improving steel mill margins after Beijing indicated its intention to remove overcapacity boosted sentiment. However, steel production continued to disappoint, with crude steel output falling 9.2% YoY to 83.2Mt in Jun, the biggest drop in 10 months. YTD production fell by 3% YoY to 510Mt, the weakest since 2020.