London 06/08/2012 - Base metals continued to trend lower on profit-taking during Monday LME pre-market trading, following sharp gains on Friday when US employment figures came in above expectations.
Trade has been fairly light, with just some 4,077 lots of copper and around 2,476 contracts of aluminium traded on Select by 10:30 BST.
"Metal prices are taking a breather as the new week gets underway, some of them having gained more than two percent on Friday," broker Commerzbank said in a note.
On Friday, the US data showed that 163,000 jobs had been created in July - the strongest showing since February and much more than the forecast number of 101,000 - while the figure for June had been revised down to 64,000 from 80,000.
However, Commerzbank added that the increase in base metals prices was below par when compared to other cyclical commodities, such as energy, adding: "[The] metals have built up considerable catch-up potential, and we therefore expect to see significant price gains in the remainder of the year."
Attention will now focus on a slew of data out this week, including industrial output data and industrial orders numbers for a range of European countries, including Germany and France and the UK. In China, industrial data will be coupled with inflation and retail sales figures, all out on Thursday, leading up to the big trade data release on Friday.
Released so far today the European Sentix Investor Confidence dropped to -30.3, with a number below zero indicating a pessimistic stance on the six-month economic outlook for the eurozone by the surveyed investors and analysts.
US Federal Reserve chairman Ben Bernanke is due to give a speech on economic measurement, though few analysts expect any market shaking comments.
Markets are also contemplating the likelihood that Spain will ask for bailout funds from the European Central Bank after prime minister Mariano Ranjoy hinted that he would be willing to take a sovereign bailout under the correct circumstances.
AMUMINIUM INVENTORIES JUMP
In metals, aluminium lost 50 cents to $1,859.50. Inventories of the metal increased by a net 15,975 tonnes, taking the total to 4,880,425. Vlissingen received a net 18,000 tonnes of the metal, with 1,211,175 tonnes now kept in warehouses there. Global cancelled warrants fell by 3,875 tonnes to 1,692,425.
Copper lost $12 to $7,433 per tonne. Warehouse stocks increased by a net 1,225 tonnes to 245,950, with cancelled warrants falling 1,775 to 45,025. The biggest inflow occurred in Gwangyang, where 2,500 tonnes were added.
Zinc was unchanged at $1,840 per tonne, with a net outflow of 2,425 tonnes from warehouses, taking stocks to 989,875. A total of 1,500 tonnes left Port Klang, Malaysia, with 825 leaving New Orleans and 100 tonnes coming out of Chicago. Cancelled warrants, at 157,825 were 2,750 lower.
Lead prices dipped by $3.25 to $1,891.75 per tonne even after stocks fell by 550 tonnes. Tin dropped by $50 to $17,850 on very light trade - only 41 lots so far. Stocks remained unchanged at 11,650 tonnes.
Nickel saw a warehouse inflow of 678 tonnes, but the price of the metal increased by $43 to $15,653 per tonne.
Steel was quoted at $380/400, while minor metal cobalt was indicated at $27,000/30,000 and molybdenum was offered at 26,500, but not bid.
(Editing by Martin Hayes)