EUROPEAN COMMODITIES UPDATE: Crude consolidates while metals cheer the weaker Dollar, but aluminium bucks the trend again

Analysis details (09:34)

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  WTI and Brent futures consolidate in early European hours as a function of a softer Dollar and risk appetite in the region, after the benchmarks settled higher by almost USD 1.50/bbl apiece yesterday. WTI Mar is around USD 76.50/bbl (low 78.21/bbl) while Brent Apr trades on either side of 85/bbl (vs low 84.81/bbl). Macro newsflow has been light for the complex but prices remain underpinned amid a concoction of the China reopen, less-severe-than-expected global growth slowdown and hopes for a peak in monetary policy tightening. Complex-specific newsflow has been light this morning. In terms of geopolitics, Ukrainian President Zelenskyy will be in Brussels whereby he will ask for further commitments as Ukrainian authorities are expecting a large-scale offensive by Russia as the first anniversary of the “special military operations” nears. Gas markets are mixed with US Henry Hub futures on a slightly softer footing intraday, while Dutch TTF trades higher by some 2% - but both within recent ranges.


• Spot gold is edging higher as the DXY loses further ground in the European morning, with the yellow metal still under the USD 1,900/oz but towards the top end of today’s 1,872-85.51/oz range, with yesterday’s high seen at 1,886.51/oz. Base metals are mostly firmer on account of the weak Dollar, with 3M LME copper oscillating on either side of USD 9,000/t. LME aluminium once again lags following the recent hefty build in warehouse stocks – with ING pointing to “a surge in LME exchange inventories in South Korean warehouses (viewed as the preferred storage hub for Russian metal), raising concerns over unwanted material being offloaded to the exchange.” Furthermore, reports suggested workers at Alcoa are in support of restarting the Spanish aluminium smelter in 2024. Elsewhere, ArcelorMittal reported this morning in which it said “evidence suggests that the customer destock we saw in the second half of 2022 has peaked, hence providing support to apparent steel consumption and steel spreads.”

09 Feb 2023 - 09:35- MetalsResearch Sheet- Source: Newsquawk