LME MORNING - Base metals mostly softer, data calendar light

By: Eddie van der Walt

London 19/08/2013 - Base metals were mildly softer in LME premarket trading on Monday but generally holding onto most of the previous week's gains.

"The near-term outlook is encouraging - metal prices seem to be on the rise, boosted by some better data out of China and Europe in recent week, which seem to be prompting short-covering and some fresh buying," FastMarkets analyst William Adams said.

The week the key focus is likely to be the release of the US Federal Open Market Committee minutes (FOMC) - scheduled for release on Wednesday. Participants will scrutinise these for any indication of when the US central bank may start to unwind its stimulus efforts.

"Overall labour market conditions are improving and several other economic indicators point to an overall strengthening economy, reinforcing our expectations that a reduction in [the] Fed's asset purchases will be announced after its mid-September meeting," Credit Suisse said.

Also of import this week is the eurozone August flash PMIs and China's August HSBC flash manufacturing PMI. But today’s calendar is light, with the Japanese trade deficit for July coming in earlier at 0.94 trillion yen, larger than the expected 0.73 trillion yen. The previous month’s reading was also revised negatively.

The dollar firmed somewhat against the euro, climbing 0.0003 to 1.3325.

In the metals, copper slipped $50.25 or about 0.7 percent to $7,349.75 per tonne. Stocks fell for the 25 consecutive day, dropping a net 6,625 tonnes to 577,450 tonnes, while cancelled warrants - metal booked for removal and in queues - declined 6,675 tonnes to 303,975 tonnes.

Aluminium was firmer, climbing $3.75 to $1,948.75 - not far from two-month highs. Inventories rose 4,375 tonnes to 5,443,050 tonnes and cancelled warrants were 5,800 tonnes lower at 2,054,600 tonnes.

"Perhaps reports of power shortages in China could start to [affect] the high energy-use aluminium sector, but the latest July output data still suggests strong production," ANZ said in a report.

Rusal has increased its planned production cut to 357,000 tonnes this year after reporting a first-half net loss of $439 million, which it attributed to oversupply weighing on prices.

Nickel slipped $115 or 0.7 percent to $14,880, shrugging off a 360-tonne drop in stocks to 205,758 tonnes and a 1,074-tonne rise in cancelled warrants to 37,476 tonnes

Tin dropped $100 to $21,825 per tonne. Tin stocks were unchanged at 14,055 but cancelled warrants edged 50 tonnes higher to 4,365 tonnes.

Zinc slipped $3 to $2,005 but lead climbed $6.50 to $2,256. Zinc stocks fell 2,575 tonnes to 1,034,700 tonnes while those of lead dipped 1,925 tonnes to 189,000 tonnes.

Steel was quoted at 120/202, while minor metals cobalt and molybdenum are neglected. Stocks are unchanged in all three.


(Editing by Mark Shaw)

RELATED TOPICS