London 19/02/2013 - Base metals were under pressure in Tuesday’s premarket, continuing to backtrack from earlier gains in downbeat trading conditions.
The reopening of Chinese markets on Monday after a weeklong holiday there has done little to inspire and, with US markets closed for the Presidents Day holiday yesterday, there was little to incentivise markets or stimulate risk appetite.
“The market is dead with low volume,” a trader said. “It is all very dull at the moment.”
The late-January/early-February broad financial marketplace rally has now stuttered to a halt and, with equities mixed this morning and the euro struggling - it was around 1.335 against the dollar, down a tenth of a cent - metal prices are expected to come under further downside pressure.
"We feel top-of range selling may outgun the fund buying that has been evident of late, which could lead to a pullback in prices," William Adams of FastMarkets said.
Still, data from the EU this morning surprised to the upside - German ZEW economic sentiment at 48.2beat the expected 35.3, while the pan-EU reading was also higher at 42.4.
“The EU ZEW data reading was even more impressive than the German reading this morning given the disparity in economic sentiment in the EU at present. This data series, like the German data, was the strongest since April 2010 and offers some optimism for those, such as [ECB president Mario] Draghi, who believe in positive contagion in the EU as a direct response to an improvement in systemic risk in 2012,” said FastMarkets analyst Jono Remington-Hobbs.
Later today, the metals-sensitive US NAHB housing market index for January is due for release when the US markets reopen.
Copper was last at $8,095 per tonne, down $24 on the previous day’s close after stocks rose a net 6,950 tonnes to 411,250 tonnes, the highest since November 9, 2011. Johor stocks rose 4,400 tonnes and the New Orleans total climbed 3,850 tonnes. Cancelled warrants were also lower, down 1,850 tonnes to 27,475 tonnes.
Aluminium edged $4.25 lower to $2,112.75 - stocks ticked 600 tonnes higher to 5,157,450 tonnes, although the Detroit total climbed 7,675 tonnes to 1,409,125 tonnes. Cancelled warrants slipped 9,625 tonnes to 1,965,000 tonnes, the lowest since December 24.
Lead dropped $11 to $2,379, with stocks and inventories both down 100 tonnes at 288,325 tonnes and 151,500 tonnes respectively. Zinc was last at $2,151.25, a drop of $3.75, with stocks unchanged.
Nickel dropped $165 to $17,690. Stocks rose 114 tonnes to 153,384 tonnes and cancelled warrants fell a sharp 3,414 tonnes to 21,480 tonnes.
Tin earlier fell to a four-week low o f $23,750 but was last slightly higher at $23,850, still down $450. Stocks dropped 135 tonnes to 13,315 tonnes but cancelled warrants at 2,055 tonnes were down 110 tonnes.
Steel was steady at $300/340 with no change in inventories once more. In the minor metals, cobalt was last indicated at $25,000/26,450 after a one-tonne decrease in stocks to 432 tonnes, of which 50- tonne are cancelled. Molybdenum traded at $24,500 - four lots have traded this morning - and was last offered at $26,500. Cancelled warrants climbed 12 tonnes at 24 tonnes but stocks were unchanged.
(Editing by Mark Shaw)