By Callum Perry – Thursday 04 November

LME base metal prices rose during the morning session on Thursday November 4, shrugging o. news that the Federal Reserve will scale back its monetary easing measures.

Although the US central bank will taper its monthly bond buying programme, this does not mean an immediate rise in interest rates – the Federal Reserve “can be patient,” according to chair Jerome Powell. The timing for rate increases “will depend on the path of the economy,” he also said.

“Neither metals nor the broader markets have been rattled by the US Federal Reserve’s announcement,” Fastmarkets head of base metal research Will Adams said.

The three-month nickel price led the rally, increasing by 1.1% to $19,380 per tonne at the open on Thursday from $19,162 at Wednesday’s 5pm close.

The cash-to-three-month nickel spread remained in a backwardation of $101 per tonne, while LME warehouse stocks remain low, dipping to 138,096 tonnes – the trend of tightening supply remains intact.

The three-month copper price increased by 0.5% to $9,506 per tonne at Thursday’s open from $9,458.50 per tonne

The three-month aluminium price gained 0.3% to $2,663 per tonne from $2,656 per tonne on Wednesday’s 5pm close.

The modest increases in prices are supported by mixed macroeconomic data yesterday from across the globe.

“The US services PMI grew to reach record highs in October, up to 66.7, supported by strong business activity amid the fading impact of lockdown restrictions,” Sucden Financial research analyst Daria Efanova said.

“]But in Europe] things are still slowing down with the news that German industrial orders rose less than expected in September following an unusually big drop in the previous month,” Kingdom Futures director Malcolm Freeman said.

The US dollar index seems unfazed by the Fed’s announcements, consolidating around 94.24.

(MetalBulletin, Nov 04, 2021)