Holiday Notice: Thanksgiving

From the physical side, as prices for key commodities soar, demand retrenchment – if not outright destruction – materializes. We see this sign most clearly in the Chinese physical markets, which have turned extremely quiet of late in light of the steep price run-ups. That’s particularly the case in copper, nickel, and aluminum.

We saw solid gains in most markets this past week, but intraday swings were massive as high volatility persists. In base metals, tin was the biggest winner for the week (up almost 13%) followed by nickel (up by 5.2%). Copper and aluminum rose by about 4% each, followed by lead (2.1%) and zinc (up by 1%). The cash to-three month spreads moved into a backwardation for both copper and aluminum. But contangos were evident in the rest of the group.

Markets pushed higher last week, with both commodities and equities enjoying decent runs. But energy sat things out for a third consecutive week. In the US equity complex, investors waded back into mega-cap and AI names after Micron's blowout Q3 earnings sparked buying in the general chip space. For the week, the S&P 500 ended up 0.1%, the Dow finished down by 0.7%, but NASDAQ tacked on 0.5%.

Base metals ended mostly lower last week as many complexes were quite overbought and arguably due for a correction.