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Andy Home: War and peace will have a major impact on the first half of 2026 for metals traded at the LME.
Operation Epic Fury, which was launched at the end February, quelled the early-year euphoria of copper and tin. Since then, the Iran war has been the main topic of discussion. This has made it difficult for traders to make sense of the headlines because they are so confusing. It seems that the Strait of Hormuz has entered a quantum world in which it is simultaneously open and closed, depending on who is speaking at any particular point?in time. Vanda Insights, a provider of oil market analyses, founded by?Vandana hari, says Schrodinger Strait is "continuing to reopen, but it's patchy and unpredictable." This is a good description of current peace talks in Doha. The LME Index (a basket of six base metals that are traded on the London Market) has fluctuated from exuberance, to dejection, to resilience in the first half of the year, and ended the period somewhere between. The performance of each metal has varied widely depending on its sensitivity to Gulf news. ALUMINIUM HIT The war has caused the aluminium industry to suffer in two ways: missile attacks on two Gulf smelters, and logistical constraints at other smelters. According to the International Aluminium Institute, regional production fell by 2 million metric tonnes annually between February and may. At the beginning of June, LME's three-month aluminum reached a record high of $3.787.50 per tonne. This was a four-year-high. Since then, the war premium has almost completely dissipated as market prices have returned to a sort of normality. Low LME inventories are part of the new normal. The combined on- and offwarrant stock has shrunk to just under 400,000 tons. Most of the Russian metal is in this inventory. Confusion over Copper The war has added confusion to an already confusing copper market. Copper's potential impact on global growth at a macro-level is negative. On a micro-level, however, the Strait closure has caused a shortage of sulphuric acids, which is affecting copper producers who use leach technology. Copper concentrates is a dysfunctional market. Smelter treatment conditions have collapsed to the point where processors now depend on anything but copper to make money. The market for refined metals is still waiting on tenterhooks to see if President Donald Trump will implement tariffs. Any day now, a decision will be made. The U.S. premium continues to drain metal from other countries. Since the middle of May, LME three-month Copper has been teetering between $13,000 per ton and $14,000. There are still plenty of super bulls in the LME option market. Investors like copper because of its structural supply deficit. ZINC SURPRISE Zinc has surprised the LME pack this year, despite having little direct exposure to war. Early in June, LME zinc for three months hit a high of almost four years at $3,658 a ton. The price closed the month 14% higher than it was at the beginning of the year. Tin had the strongest performance. According to the International Lead and Zinc Study Group, the global zinc market is in a slight deficit. The shortage is concentrated outside of China where the smelter industry continues to perform below expectations. China is steadily increasing production and on track to achieve self-sufficiency within the next few years. NICKEL PLAYS INDONESIAN NUMBERS GAMES The nickel trading story has been dominated by Indonesia and its government's efforts to curb the production of this sector. The LME's three-month nickel rate reached a record high of $20,000 a ton, a level not seen in two years. Indonesian producers who use acid to leach their products are under more pressure due to the sulphur influx from the Gulf. The price has fallen back to $16,000 per tonne due to growing speculations that Indonesia will loosen up its mining quotas. While Jakarta weighs its options the surplus metal continues. LME stock levels have peaked, but Shanghai Futures Exchange inventories just passed 100,000 tons for first time since 2016. TURBULENT TIN AND OVERSUPPLIED LEADS Lead and tin have not been affected by the Gulf War, so each can follow their own narrative. This is the case for tin. It's a promise that there will be a structural shortage of the soldering metal due to the rising demand. Tin was the best performer in the LME complex for the first half 2026 with gains of 27%. Lead is, on the other hand, a market that has been weighed down by excess metal. It closed out the first half of this year with 7% losses. Since the beginning of the year, the combined LME on-warrant and off-warrant inventories have?hovered around the 500,000 ton mark. LME trading is characterized by warehouse arbitrage and rotation of inventory between on-warrant or off-warrant storage. This also shows how the aluminium market has changed dramatically since the beginning of the Iran War. Andy Home is a columnist at. This column is great! Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Gold prices rise for the first time in five weeks on Fed rate hike bets
Investors lowered their expectations of U.S. interest rate increases after softer than expected jobs data. As of 0416 GMT spot gold rose 1.3% to $4,177.31 an ounce. This is the highest price since June 23. U.S. Gold Futures for August Delivery gained 1.6% to $4,190.70. Bullion is on track to gain 2.2% in a week, its first weekly gain since the week ending?May 29. Weaker-than-expected data from nonfarm payrolls as well as private payrolls have tempered inflation concerns and interest rates that are higher for longer. Dollars were headed for a weekly decline, allowing holders of other currencies to afford greenback priced bullion. Kelvin Wong is a senior analyst at OANDA. He said, "What we are seeing is a reduction in pricing of Federal Reserve rate hikes for the rest of this year and Q1 of next year. This has been driven primarily by yesterday's rather lacklustre data on the labour market." The nonfarm payrolls rose by 57,000 last month. This was a far cry from the 110,000 economists expected in a recent poll. According to CME FedWatch Tool, traders now price in an?approximately 54% chance that a rate increase will occur in September. This is down from 66% prior to the release of the data. Gold is less attractive when interest rates are higher, because they tend to make other assets with interest more appealing. Wong said that rate-hike expectations haven't?fully vanished. He added that gold prices could fall to $3,500 per ounce later this year. The World Gold Council reported that central banks had returned to a 'buying mode' in May. According to the latest data, the official gold reserves have increased by a total of?41 tonnes during the month. Spot silver increased?2.3% per ounce to $62.41, platinum rose?2.5% at $1,656.05, while palladium gained 1% to $1281. The three metals are nearing their highest levels for more than a month and heading towards weekly gains. (Reporting from Bengaluru by Pablo Sinha; Editing by Rashmi aich and Subhranshu Sahu).
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Gold prices rise for the first time in five weeks on Fed rate hike bets
As investors lowered their expectations for Federal Reserve rate hikes after softer than expected U.S. job data, gold rose by more than 1%. As of 0235 GMT spot gold rose 1.4% to $4179.94 an ounce. This was its highest price since June 23. U.S. Gold futures for delivery in August gained?1.6%, to $4193.20. Bullion is on track to gain 2.3% in a week, its first weekly gain since the week of May 25. Weaker-than-expected data from nonfarm payrolls as well as private payrolls helped ease concerns about inflation and longer-term interest rates. The dollar was heading for a weekly decline, making the price of greenback bullion more accessible to holders of other currencies. Kelvin Wong is a senior analyst at OANDA. "What we are seeing is a reduction in the pricing of U.S. Federal Reserve rates hikes for Q1 and the remainder of this year," he said. The Bureau of Labor Statistics of the Labor Department reported that nonfarm payrolls grew by 57,000 last month. The economists polled had predicted payrolls to increase by 110,000. According to CME FedWatch Tool, traders now price in a roughly 54% chance that rates will be raised in September. This is down from 66% prior to the release of the data. Gold is less attractive when interest rates are higher, because they tend to make other assets with interest more appealing. According to?Wong, the price of gold could reach $3,500/oz by the end the year. The World Gold Council reported that central banks had resumed their buying in May. According to the latest data, official reserves of gold grew by 41 tons in the month. Silver spot rose by 2.3%, to $62.43, platinum gained 2.7%, to $1660.05 and palladium increased 1.3%, to $1284.40. All three metals are at or near their weekly highs. (Reporting and editing by Rashmi aich in Bengaluru, with Pablo Sinha reporting from Bengaluru)
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Asian markets gain footing after US PMIs and jobs data lift stocks
The?stocks rose in the Asian trading session on Friday, following a lukewarm U.S. The jobs report cast doubt on the 'prospect' of an imminent Federal Reserve rate hike, and regional activity indicators pointed to an expansion in the economy during June. MSCI's broadest Asia-Pacific share index outside Japan has risen 1.3% after two days of declines. South Korea's Kospi fluctuated between gains and losses and ended the day up 3%, as buyers took advantage of battered chipmaker shares. S&P 500 futures rose by 0.3% while Japan's Nikkei 225 reversed its early losses and traded 0.7% higher. The Purchasing Managers' Index data (PMI) released on Friday showed increased activity in the region. Japan's?services?sector resumed expansion in June, after stagnating the previous month. China's service activity expanded at a slower pace, but overseas demand rose at the fastest rate since 20 months. U.S. LABOUR MARKET COOLING U.S. Job growth slowed in June, and payroll gains from the previous two months were revised 'lower,' according to data released Thursday. This indicates a cooling of the labour market. As workers left the workforce, the unemployment rate fell to 4.2% last month from 4.3% the previous month. This pushed the participation rate down to its lowest level in over five years. In a report, Westpac analysts said that "the figures challenged the narrative" that the Fed is on track to raise rates in the second half this year. The lackluster jobs data dampened traders' expectations for an imminent rate increase and increased the odds that Fed rates will remain on hold until October. Fed funds futures are pricing a 46.8% implied probability that the U.S. Central Bank will maintain rates at its September 15-16 meeting, compared to 35.8% a day before. This is according to CME Group's FedWatch. The overnight stock market on Wall Street was a mixed bag. The S&P 500 remained?flat, and the Nasdaq Composite fell 0.8%. However, the Dow Jones Industrial Average closed at a record high. On Friday, the U.S. stock market will close for Independence Day. The U.S. Dollar was unchanged at 161.125 yen against the yen. This was due to the fact that the market was less liquid because of the holiday, and traders were on the lookout for any possible intervention. This week, the Japanese currency has been volatile after reports on Thursday that?authorities might have adopted a different approach to their forays in the market. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, fell 0.2% to 100.80. Brent crude futures in Asia rose 0.5%, to $72.12 per barrel. Gold rose 1.4% to $4,179.73. (Reporting by Gregor Stuart Hunter; Editing by Jamie Freed) In cryptocurrency, bitcoin was unchanged at $61,522.23, while ether rose 0.3% to $1,709.33. (Reporting and editing by Jamie Freed; Gregor Stuart Hunter)
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Peace efforts continue to hold as oil prices rise slightly before the long US weekend
The price of oil rose slightly Friday, just before the long holiday weekend here in the United States. As cautious optimism held on efforts to bring peace between the United States and?Iran in the Middle East. Brent futures rose 17 cents or 0.24% to $72.10 per barrel at 0155 GMT. West Texas Intermediate rose 14 cents or 0.20% to $68.83 per barrel. The U.S. market will be closed on Friday in advance of Independence Day. Independence Day is celebrated on Saturday. The two benchmarks reached their lowest levels in the previous session since the U.S./Israeli war against Iran started late February. Brent for the week fell by 0.02%, and WTI rose 0.12%. These were the lowest weekly movements in months for both Brent and WTI. Tim Waterer is the chief market analyst for KCM Trade. He said, "It seems that there's cautious optimism in the market. It wants to believe that 'the peace efforts' will last, but it still hedges its bets, until it sees concrete evidence on water." Some nations have begun to increase production in response to the reopening the Strait of Hormuz. This was the route that carried a fifth of the daily world supply of?oil?and liquefied gas before the start of the war. Kuwait's oil output jumped sharply in June to 1.65 million barrels per day from the 580,000 barrels per day it produced in May. A source familiar with this matter confirmed that. Kuwait boosted its exports on Thursday following the U.S. Iran interim peace agreement. According to shipping and trade data, Saudi Aramco has switched to spot pricing in order to accelerate sales to Asia. Helen Clark, Tom Hogue (Editing)
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Sources: Nayara refinery in India sells its gasoline to Russia through traders
Two sources who have direct knowledge of this matter confirmed on Thursday that traders had sold Nayara Energy gasoline to Russia. The country is currently experiencing fuel shortages due to Ukrainian attacks on the energy infrastructure. On Wednesday, it was reported that Russia began seaborne imports from India of gasoline without naming the supplier. Nayara has not responded to an email sent by? Nayara did not respond to an email from?Einen seeking comment. Rosneft, the Russian oil giant, owns a 49 percent stake in Nayara. Hardeep Singh Puri, Indian Oil minister, said at a media briefing on Thursday that Indian companies "were not" selling fuel to Russia. However, it was "possible", if Russia bought fuel of Indian origin from traders. Since the European Union sanctions of last July, which made it difficult to pay customers and suppliers, Russia-backed refiner Nayara relies on traders for its crude imports and refined fuel exports. Vadinar, a refinery that processes 400,000 barrels of oil per day in western India, has been processing only Russian crude since the sanctions. According to an industry source, it was reported that at least 60,000 tons of gasoline were?sent? from India to Russia. Another source said two tankers containing?30,000-40,000 tons had been sent. The tanker invoice that was seen on Thursday indicated that the vessel Agni - loaded with gasoline from Vadinar - sailed to Fujairah in June '20. However, LSEG tanker information showed that this vessel flying the flag of Cameroon had passed past Fujairah heading north and that it was now in Suez.
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Asian markets are choppy after US jobs data dampen Fed rate hike expectations
After a lukewarm U.S. The jobs report has thrown cold water on the 'prospect' of an imminent rate increase by the Federal Reserve. MSCI's broadest Asia-Pacific share index outside Japan fluctuated in gains and losses. It gained 0.1% following two days of consecutive declines. The sharp declines in U.S. chipmakers trading weighed heavily on South Korea's Kospi. S&P 500 and Nasdaq futures both rose by 0.1% while Japan's Nikkei was down by 1%. According to data released Thursday, the U.S. employment growth slowed dramatically in June, and payroll gains from the two previous months were'revised down.' This indicates a cooling of labour markets. As workers left the workforce, the unemployment rate fell to 4.2% from 4.3% in may. This pushed the participation rate down to its lowest level in over five years. The figures challenged the narrative that the Fed is on track to raise rates in the second half this year, wrote Westpac analysts in a research report. The lackluster jobs data dampened traders' expectations for an imminent rate increase and increased the odds that the Fed would keep rates on hold till October. FedWatch, a tool of the CME Group, shows that Fed funds futures price a 46.8% implied probability that the U.S. Central Bank will maintain rates at its September 15-16 meeting. This is compared to 35.8% a day before. Overnight, a mixed bag of stocks on Wall Street was seen. The S&P 500 was unchanged and the Nasdaq Composite fell 0.8%. However, the Dow Jones Industrial Average closed at a record high. The market in the?U.S. The?U.S. The U.S. Dollar was up 0.2% against the?yen when Asian trading began, but market liquidity had been thinned out by the holiday. After a twitchy Thursday session, the greenback gained some strength. The Japanese yen also surged after reports that the authorities had adopted a different approach in their forays on the market. The reason for the sudden surge in value was not immediately apparent. The?U.S. The dollar index, which measures greenback strength against a basket six currencies, remained'steady' at 100.98, after dropping 0.5% on Friday. Brent crude futures fell 0.4% to $71.49 when trading resumed in Asia. Gold rose 0.1% to $4,125.49. Bitcoin was down by 0.4% to $61,306.45 while Ether was down by 0.7% to $1,692.16. (Reporting and editing by Jamie Freed; Gregor Stuart Hunter)
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Overnight, Russian attacks in Ukraine kill two and injure eight, according to officials
In the early morning hours of Friday, Russian officials said that two people had been?killed? and eight others injured? in overnight attacks on Ukraine. Oleh Hryhorov is the head of the regional military authority. He said that Russian drones struck a private home in the Sumy region. Two people were killed, and one was injured. Oleksandr ilkul, head of the city defence council, confirmed that seven people were injured in the central ukranian city of Kryvyi Rih. This is the hometown of President Volodymyr Zelenskiy. On Friday, Kyiv will observe a day of mourning after nearly 'three dozen people were killed in the deadliest Russian attack against?the Ukrainian capital this year. (Reporting from Jekaterina Glubkova, Tokyo; Editing Stephen Coates).
Aluminum prices rise on weaker dollar and softer US rate hike predictions
The price of aluminium rose on Friday due to a weaker dollar and the easing of concerns about an impending 'U.S. Interest rate hike.
Benchmark three-month aluminum on the London Metal Exchange was up 0.53% at $3,108 per metric ton by 0300 GMT. The Shanghai Futures Exchange's most traded aluminium contract rose 1.18%, to 22,755 Yuan ($3,355.60).
The market closely monitored macroeconomic conditions which were offset by announcements made this week that suggested improved aluminum supply prospects.
Citi published a note overnight that said the concerns about a rapid return to Middle East supply were overstated. The supply will not arrive quickly enough to offset growth in demand.
The data indicating a cooling U.S. labor market has calmed the expectations of a Federal Reserve rate hike in the near future, which is helping industrial metals. Rates that are higher can reduce economic activity and demand for metals.
Although a rate increase is expected later in the year, odds are still high that it will happen this month.
Daniel Hynes said that the easing of concerns about monetary tightening boosted risks appetite and pushed metals higher.
A cheaper dollar makes greenback-denominated commodities more affordable for buyers using ?other currencies.
Copper prices also rose despite the recent decline in semiconductor stocks. In recent years, the red metal has benefitted from projections for?demand growth linked to AI infrastructure upgrades, electrical grid improvements and electric vehicles.
PMI data this week revealed that factory activity in China, the world's largest copper consumer, grew for seven straight months in June. The Yangshan Copper Premium
On the LME, copper rose by 0.72% while on the?SHFE, it increased by 0.8%.
Zinc, lead, and nickel all rose in price on the LME. Tin also grew by 1.84%.
Zinc fell 0.1% on SHFE. Lead rose 0.35%. Nickel grew 0.51%. Tin climbed 0.78%.
(source: Reuters)