By: Kathleen Retourne

London 29/10/2012 - Base metals were back around early-September lows in Monday morning LME trading, while uncertainty surrounding both Greece and Spain continues to take its toll on the euro. The single currency was last softer at 1.2905 against the dollar.

“Alongside weaker Asian equity markets and a firmer US dollar, selling on the part of speculative financial investors is no doubt partly to blame,” Commerzbank added in a note.

The coalition government in Greece is deadlocked over the terms of its 13.5-billion-euro austerity package ahead of a new deadline of November 5.

In Spain, retail sales fell for the 27th consecutive month on September, down 10.9 percent on the same month of last year. Prime Minister Mariano Rajoy will host his Italian counterpart, Mario Monti, for talks on the eurozone crisis today.

The direction of trading will hinge on data due later this week including the October PMIs for the US, the eurozone and China as well as the final US jobs report on Friday before the country's presidential election.

"The current sell-off is overdone as global growth has probably bottomed," broker Credit Suisse said. "In this context, this week’s PMI numbers from China, Europe and the USA will be watched particularly closely."

Meanwhile, trading may be affected this afternoon as New York goes into lockdown, with forced evacuations in place ahead of Hurricane Sandy - due to hit the city later today.

CME Group has issued a notice stating that the New York trading floor will be closed and all business will go through its electronic trading platform, while the New York Mercantile Exchange will be closed on Monday and possibly on Tuesday.


ANTWERP INCREASES STOCKS, QUEUES COULD BUILD

Most of today's inventory movements were centred on Antwerp. Aluminium, zinc, lead and copper stocks in this location have been rising since the start of the month, although there have been drawdowns in steel.

Total stocks across all metals are up 416,715 tonnes from October 1 at 504,080 tonnes, of which 143,310 tonnes are booked for removal.

Copper at $7,729.25 per tonne was down $86.75 on Friday’s close, while in the forward spreads Nov/Dec is showing a $1.75 backwardation.

Total stocks at 240,450 tonnes were up a net 20,650 tonnes, the highest since August 10. Antwerp took its first delivery of copper stocks at 21,300 tonnes. Cancelled warrants were slightly lower, down 725 tonnes at 41,275 tonnes.

Lead at $2,009 dropped $6 while tightness is evident in the Nov/Dec spread, which was last at $6.50/7.00 back. Stocks climbed 16,350 tonnes to 326,675 tonnes.

Once again, Antwerp was responsible for the jump - stocks here rose 16,425 tonnes to 107,550 tonnes. Cancelled warrants fell 75 tonnes to 106,750 tonnes.

Zinc was down $7 at $1,827. Inventories in Antwerp rose 34,275 tonnes to 156,400 tonnes, all of which are on warrant. Total stocks at 1,174,325 tonnes were the highest since January 26, 1995. Cancelled warrants at 383,150 tonnes were down 1,150 tonnes.

Aluminium at $1,907.25 is off its earlier low of $1,904.50, the cheapest since September 3. Inventories were up 8,200 tonnes at 5,060,825 tonnes, with Vlissingen stocks up 11,075 tonnes at 1,281,775 tonnes and Rotterdam up 2,950 tonnes at 657,300 tonnes. Cancelled warrants fell 8,825 tonnes to 1,728,450 tonnes.

Nickel has fallen back below $16,000 - it was last at $15,985, down $20 - even after stocks fell 78 tonnes to 128,934 tonnes and cancelled warrants rose 654 tonnes to 12,726 tonnes.

Tin at $19,800 was unchanged from Friday’s close. Stocks were also unchanged at 11,750 tonnes while cancelled warrants at 4,790 tonnes were up 380 tonnes.

Steel was last at $330/375, with stocks down 3,120 tonnes due to declines in Antwerp. In the minor metals, cobalt was offered at $26,500 - cancelled warrants rose one tonne to 41 tonnes. Molybdenum, meanwhile, was neglected.


(Editing by Mark Shaw)