Base metals prices on both the London Metal Exchange and Shanghai Futures Exchange were mixed on the morning of Tuesday March 22, and volumes on the former have been very light with less than 2,000 lots traded as at 6.30am London time.
* Federal Reserve chair Jerome Powell adamant the US central bank will attack inflation aggressively.
* Brent crude oil back at $115 per barrel.
* Expect LME nickel to find its price level today.
Base metals
The three-month base metals prices on the LME were mixed this morning, with aluminium ($3,525.50 per tonne) and lead ($2,266.50 per tonne) up by 0.1% and 0.7% respectively, while copper ($10,242.50 per tonne) and tin ($41,800 per tonne) were down 0.3% and 0.2% respectively and zinc ($3,896 per tonne) was down by 0.6%.
The most-traded contracts on the SHFE were also mixed on Tuesday morning, with April nickel down by 3.2% at 207,640 yuan ($32,641) per tonne, which would suggest an international nickel price of around $28,868 per tonne. May tin was down by 1.1%, May aluminium was off by 0.3%, May lead and copper were both up by 0.1%, with the latter at 73,240 yuan per tonne, and May zinc was up by 1.1%.
Precious metals
Gold, silver and platinum were slightly firmer this morning, up by an average of 0.3%, with gold at $1,935.60 per oz. But spot palladium bucked the trend with a 0.6% fall to $2,571.50 per oz.
Wider markets
With the United States set to raise interest rates as needed to combat inflation, US 10-year treasuries yields continue to rise and were recently at 2.33%, compared with Monday’s close at 2.29%.
Asia-Pacific equities were mainly stronger this morning: the Hang Seng (+1.95%), the Nikkei (+1.48%), the Kospi (+0.89%) and the ASX 200 (+0.86%), although China’s CSI 300 (-0.3%) was bucking the trend.
Currencies
The US Dollar Index was on the rise again on Tuesday morning and was recently at 98.91, compared with Monday’s close of 98.49. The Federal Reserve’s aggressive stance on monetary policy no doubt helping to underpin the dollar.
With the dollar stronger, the other major currencies were weaker: the euro (1.0971), the Australian dollar (0.7380) and sterling (1.3124), while the Japanese yen (120.47) continues to weaken at a fast pace – the last time it was above 120.00 was in February 2016.
Key data
Tuesday’s economic agenda contains data on the United Kingdom’s public sector borrowing requirement, European Union current account, UK industrial order expectations and US Richmond manufacturing index.
In addition, European Central Bank President Christine Lagarde, Federal Open Market Committee members John Williams and Loretta Mester and UK Monetary Policy Committee member Jon Cunliffe are scheduled to speak.
Tuesday’s key themes and views
The base metals still seem to be adjusting to the gyrations and volatility of recent weeks and the low volumes traded suggest many traders are still wary of the exchange. But as for prices, if you ignore the upward spikes centered on March 7/8, then overall upward trends still seem to be intact for copper, aluminium and zinc, less so for lead and tin, and with the jury still out for nickel. But given where SHFE nickel prices were this morning, we would expect LME nickel prices to find their price level later today.
Gold prices are also generally holding up well, with prices around where they were before March 7. While haven demand is still on a back footing for now, the inflationary situation and uncertainty over where the Russian-Ukraine war is heading remain supportive issues.