Base metals mixed, stronger dollar and tariffs weigh on market
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Base metal prices showed mixed movements on Wednesday as the U.S. dollar strengthened following robust economic data. Meanwhile, uncertainties around President-elect Donald Trump’s tariff plans prompted a cautious stance among investors.
Market highlights
Copper performance
Three-month copper on the London Metal Exchange (LME) fell 0.1% to $8,993 per metric ton by 0707 GMT.
The most-traded February copper contract on the Shanghai Futures Exchange (SHFE) rose 0.1% to 74,480 yuan ($10,158.90) a ton.
U.S. dollar strength
The dollar index (DXY) was at 108.65, slightly below its two-year high of 109.25 reached on January 2.
A stronger dollar, supported by solid U.S. economic data, makes dollar-priced commodities more expensive for buyers using other currencies.
Trump Tariff Uncertainty
Recent reports suggested that Trump’s team might consider selective tariffs targeting sectors critical to national or economic security. However, Trump denied these plans, creating uncertainty that has left the market in a "wait-and-see" mode.
Performance of other metals
LME metals
Aluminium declined 0.2% to $2,513 per ton
Nickel gained 0.3% to $15,440
Zinc fell 0.4% to $2,865
Tin dropped 0.3% to $29,870
Lead rose 0.2% to $1,960
SHFE metals
Aluminium increased 0.3% to 19,715 yuan per ton
Nickel surged 1.6% to 125,230 yuan
Zinc dropped 1.2% to 24,225 yuan
Lead remained flat at 16,735 yuan
Tin gained 1.4% to 251,600 yuan
Broader market sentiment
Galaxy Futures noted in a report that "Trump’s denial of the tariff plan has added uncertainty to the market," advising investors to adopt a cautious approach until further clarity emerges.
Conclusion
Base metals are navigating a complex environment shaped by a stronger dollar, geopolitical uncertainties, and evolving trade policy expectations. While the robust U.S. economic data supports the greenback, the market remains on edge as it awaits finalized tariff policies under the incoming Trump administration. Traders are likely to maintain a cautious stance until clearer signals emerge.
Market highlights
Copper performance
Three-month copper on the London Metal Exchange (LME) fell 0.1% to $8,993 per metric ton by 0707 GMT.
The most-traded February copper contract on the Shanghai Futures Exchange (SHFE) rose 0.1% to 74,480 yuan ($10,158.90) a ton.
U.S. dollar strength
The dollar index (DXY) was at 108.65, slightly below its two-year high of 109.25 reached on January 2.
A stronger dollar, supported by solid U.S. economic data, makes dollar-priced commodities more expensive for buyers using other currencies.
Trump Tariff Uncertainty
Recent reports suggested that Trump’s team might consider selective tariffs targeting sectors critical to national or economic security. However, Trump denied these plans, creating uncertainty that has left the market in a "wait-and-see" mode.
Performance of other metals
LME metals
Aluminium declined 0.2% to $2,513 per ton
Nickel gained 0.3% to $15,440
Zinc fell 0.4% to $2,865
Tin dropped 0.3% to $29,870
Lead rose 0.2% to $1,960
SHFE metals
Aluminium increased 0.3% to 19,715 yuan per ton
Nickel surged 1.6% to 125,230 yuan
Zinc dropped 1.2% to 24,225 yuan
Lead remained flat at 16,735 yuan
Tin gained 1.4% to 251,600 yuan
Broader market sentiment
Galaxy Futures noted in a report that "Trump’s denial of the tariff plan has added uncertainty to the market," advising investors to adopt a cautious approach until further clarity emerges.
Conclusion
Base metals are navigating a complex environment shaped by a stronger dollar, geopolitical uncertainties, and evolving trade policy expectations. While the robust U.S. economic data supports the greenback, the market remains on edge as it awaits finalized tariff policies under the incoming Trump administration. Traders are likely to maintain a cautious stance until clearer signals emerge.