LME MORNING - Base metals firmer, copper helped by Chilean strike

By: Eddie van der Walt

London 08/04/2013 - Base metals firmed in Monday's LME premarket, with copper leading the way on news of a national strike in top producer Chile.

Copper was up more than one percent earlier this morning, with unions representing workers at Chilean state copper producer Codelco and mining companies including BHP Billiton set to announce a national strike today, according to reports. Chile produces around 30 percent of the world's copper.

On Friday, lower-than-expected US jobs numbers added to the growing signs of economic woe.

"The headline number was outright weak at 88,000 (compared to 236,000 in February)," broker Credit Suisse said. "On the positive side, the last two months were revised up by 61,000, the number of temporary workers increased and 'hours worked' also rose. The latter two aspects usually point to more real job gains later."

While some elements of the report, such as the 24,000-decline in retail jobs, look like outliers, that this could still be the result of tighter fiscal policy, it said, warning that "US GDP numbers are likely to remain volatile".

Still, the unemployment rate dipped 0.1 percentage points - this means the US Federal Reserve is now only 1.1 percentage points from its unemployment rate target of 6.5 percent.

In wider markets, Asian equities are generally firmer, with the Nikkei adding nearly three percent to 13,192 and the Hang Seng up 13 points at 21,740. The FTSE 100 and Germany's Dax were both up more than 0.43 percent, with France's CAC-40 up 0.7 percent.

In currencies, the euro is unchanged this morning at 1.298 against the dollar.

Among other commodities, gold is down a fractional 35 cents at $1,567.55 per ounce. Brent crude oil, which recovered somewhat from its lowest level since July set on Friday, was last at $104.57 per barrel, up 27 cents.

The economic agenda is fairly quiet. Japan's economic watchers sentiment climbed to 57.3 from 53.2, while EU Sentix Investor confidence and German industrial production are due later.


COPPER CANCELLED WARRANTS AT ALL-TIME HIGH

Copper was last at $7,468 per tonne, up $62, with about 5,875 lots traded as of 09:15 BST.

"The stabilisation in copper prices over the last week is consistent with the trend of more tempered fund selling, with CFTC positioning showing ‘managed money’ shorts at an all-time record," ANZ said.

Stocks decreased for the first time in 36 sessions, falling 200 tonnes, with outflows from New Orleans and Singapore. Total inventories are now at 579,400 tonnes. Cancelled warrants rose 300 tonnes to 147,325 tonnes, a new all-time high.

Aluminium was last at $1,891 per tonne, up $4. Stocks rose 175 tonnes to 10,100 tonnes, with Vlissingen accepting 7,100 tonnes. Cancelled warrants climbed 11,825 tonnes to 1,983,675, the highest since February 15.

Zinc gained $9.25 to $1,894.25 after inventories fell 5,550 tonnes to 1,148,950 tonnes - 2,175 tonnes left Trieste in Italy and 2,525 tonnes left New Orleans. This is the lowest stock level since October 30. Cancelled warrants also fell 5,500 tonnes to 685,000 tonnes.

Lead was last at $2,062.50, up $17.50 even as stocks increased 150 tonnes to 26,550 tonnes. Cancelled warrants fell 250 tonnes to 135,750 tonnes.

Nickel was last at $16,180, up $130, although inventories rose 582 tonnes to 166,866 and cancelled warrants fell 246 tonnes to 23,958 tonnes. And tin edged $37 higher to $22,932 even though stocks climbed 15 tonnes to 14,415 tonnes and cancelled warrants dipped 120 tonnes to 8,960 tonnes.

Steel billet was last quoted at $205/300, with stocks unchanged at 77,870 tonnes although cancelled warrants slumped 3,575 tonnes to 44,265. In the minor metals, cobalt was quoted at an unchanged $25,000/25,750, with stocks increasing 21 tonnes to 488 tonnes. Cancelled warrants fell 16 tonnes to 210 tonnes. Molybdenum was neglected.


(Editing by Mark Shaw)

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