EUROPEAN COMMODITIES UPDATE: Mixed trade in the base metal complex but crude stays firm

Crude Oil: WTI Feb +0.7%/Brent Mar +0.5%

• A firm Friday session in the crude complex as risk appetite grinds higher in early European hours, with the crude benchmarks also supported by constructive Chinese GDP and activity data.


• To recap, Industrial Production & Retail Sales beat expectations with China's economy growing 5.4% Y/Y (exp. 5.0%) in Q4 and by 5.0% (exp. 4.9%) for 2024 but saw mixed commentary from the stats bureau which noted the impact of external environment changes is deepening, domestic demand is not sufficient, and economical operations still face many difficulties and challenges but also stated that positive factors will outweigh negative factors for China's economy in 2025.


• Elsewhere, Colonial Pipeline now estimates an earlier-than-expected restart of Line 1 on Friday after it made progress with on-site work to identify the source of a leak on Line 1 and began repairs.


• Looking at technicals, the desk at ING posits "the market is in overbought territory and so overdue a correction. "


• WTI Feb resides in a current 78.65-79.44/bbl range and Brent Mar trades within 81.37-81.93/bbl.

Nat Gas: Dutch TTF -0.3%

• Prices subdued on either side of EUR 46/MWh amid a lack of catalysts and relatively quiet macro newflow.


• With regards to storage, ING suggests "In Europe, storage continues to trend below the five-year average with it now a little over 63% full, down from 78% at the same stage last year and below the five-year average of 70% full. Milder weather is forecast in NW Europe next week, which could slow the pace of draws."

Precious Metals: Gold -0.3%, Silver -0.9%, Palladium -0.4%

• Subdued price action in the metal complex as the Dollar continues to grind higher, and with the Middle Eastern geopolitical landscape more constructive after yesterday's blip surrounding last-minute tweaks to the Israel-Hamas deal.


• Aside from that, macro newsflow has been quiet in the European Friday morning thus far, with the Friday calendar also light.


• Spot gold resides in a USD 2,705.81-2,717.43/oz range - well within Thursday's USD 2,690.05-2,724.78/oz parameter.

Base Metals: 3M LME Copper -0.4%

• Mixed trade in the base metal complex despite the constructive Chinese data overnight and the risk appetite in the European morning.


• In October 2024, Rio Tinto and Glencore held early-stage talks on a potential merger, which would create the largest mining company rivalling BHP. FT suggests that the discussions ended without progress, with concerns over Glencore's coal assets and limited synergy benefits for Rio Tinto, according to FT.


• 3M LME copper ekes mild gains and resides in a current narrow USD 9,239.00-9,295.50.t range.


• Iron ore prices notched a weekly rise, with Dalian iron ore ending daytime trade at +1.3% with traders citing the Chinese GDP data.


• China's economy grew 5.4% Y/Y (exp. 5.0%) in Q4 and by 5.0% (exp. 4.9%) for 2024 but saw mixed commentary from the stats bureau which noted the impact of external environment changes is deepening, domestic demand is not sufficient, and economical operations still face many difficulties and challenges but also stated that positive factors will outweigh negative factors for China's economy in 2025.

17 Jan 2025 - 09:55- MetalsData- Source: Newsquawk