London 07/02/2013 - Base metals consolidated at softer levels in slow Thursday LME premarket trading, marking time ahead of the early-afternoon central bank monetary policy announcements - no change is expected from either the UK or Europe.
Prices otherwise continue to drift in a technical retracement from last week's rally highs, with business also slowing ahead of the Chinese New Year holidays next week.
"It is a typical pre-market - some business in Asia, ranges in place but not very much trade. The market is in a drifting mode now, and we can't see that changing at the moment," a trader said.
Since rising to multi-month and multi-week highs last week, most metals have relinquished some of these gains, while volumes and investor interest have slowed in the run-up to next week's Lunar New Year holidays. Asian markets will be closed at the start of the week, while in China itself exchanges there will be officially closed over February 9-15.
"In reality, it's a couple of weeks that [the Chinese] are out, although we could see the market forced up a bit next week to try and get a reaction when the SHFE reopens," the trader said.
There was little incentive or directional flows from other markets this morning, with the euro stuck in mid-range against the dollar between the one-week low on Tuesday of 1.3458 and last week's 14-month high of 1.3711. It was slightly steadier from Wednesday at around 1.3555 ahead of the central bank policy meetings later.
The UK BoE is expected to maintain interest rates at historic lows as is the ECB - its rate is also at a record low of 0.75 percent. Markets will focus on any comments by the bank's president, Mario Draghi, about the euro's recent strength as well as the bank's view on eurozone economic prospects.
As well today, the US data newsflow resumes after yesterday when no data was issued - this afternoon December US non-farm productivity and unit labour costs and weekly US unemployment claims will be released.
COPPER HOLDING ABOVE $8,200/T, INVENTORY-SWELL CONTINUES
Copper was under light pressure, managing to hold above $8,200 for now but at $8,238 per tonne was still down $7 from Wednesday's kerb close.
The mini-trend of inventory increases continued, with stocks up for the third successive day - the net 2,400-tonne increase lifted the total to a fresh 14-month high of 388,900 tonnes. So far this week, inventories have risen 17,100 tonnes.
Aluminium tiptoed back to $2,100, an increase of $2 - earlier sell-stops were seen down to $2,082. Stocks fell 8,975 tonnes to 5,138,775 tonnes - the usual drawdowns were seen from Detroit, Johor and Vlissingen.
The crunch June/July spread was indicated at a tight $15.00/17.00 backwardation, little different from the Wednesday level.
In others, lead was supported on a sub-$2,400 dip, trading at $2,408, a $14 loss still. Inventories declined for the 14th day in a row - down 2,400 tonnes at 287,500 tonnes, the lowest for four months.
Sister metal zinc was $12 lower at $2,158 - stocks dropped 1,050 tonnes to 1,196,025 tonnes, the lowest for two-and-a-half months.
Nickel slipped to $18,275, a $45 loss, after stocks rose 324 tonnes to 150,966 tonnes, the highest since April 2010. Tin traded at $24,711, a $139 loss - stocks climbed 40 tonnes to 13,315 tonnes.
Steel billet was indicated at $300/330 - stocks held at 83,070 tonnes for the 19th day in a row. Cobalt was quoted at $25,050/26,450, while inventories fell one tonne to 433 tonnes. Molybdenum was neglected.
(Editing by Mark Shaw)