London 06/11/2012 - Base metals were trading routinely during Tuesday's LME premarket, managing to hold above the previous session's lows after a sideways pattern developed ahead of the outcome of today's US presidential election.
"It is quieter today - not much volume going through and waiting for this election to be out of the way," a trader said.
The US presidential election takes place later on Tuesday, with incumbent Barack Obama and challenger Mitt Romney roughly neck and neck in the popular vote. In China, the communist party begins its 18th National Congress on Thursday, with Xi Jinping and Li Keqiang set to be elected to succeed Hu Jintao and Wen Jiabao as top Politburo members.
"You often find that the market finds excuses to not trade, so doubtless tomorrow or Thursday there will be others," the trader added.
The complex remains vulnerable on the downside, however, with equities mixed and the euro not far off two-month lows. It was trading around 1.2800 against the dollar, having touched 1.2768 at one stage, not far off Monday's 1.2765 low.
Eurozone worries are back to the forefront this week, with Greece preparing to vote on the next wave of austerity measures, while the ECB seems to have concerns that it may have been over-generous when accepting Spanish bonds as collateral.
For the metals, tomorrow will see November traded options declared, although no fireworks are expected, as has been the case in previous months.
COPPER SUPPORTED ABOVE $7,600/T
Copper advanced to $7,692 per tonne, up $42 from Monday, when the market dipped to a two-month low of $7,596. Some psychological support is expected on dips towards $7,600 now.
Warehouse inventories rose a net 6,075 tonnes to 247,400 tonnes due to warrantings in South Korea, New Orleans and Rotterdam.
Aluminium business at $1,914 was $8 higher, with the market holding above $1,900 for now. Inventories rose 11,300 tonnes to 5,090,675 tonnes due to a hefty 17,350-tonne warranting in Vlissingen, which now holds 1,330,000 tonnes, just 86,275 tonnes fewer than Detroit.
Lead business at $2,151 was up $24, with stocks falling for the sixth day in a row - down 525 tonnes at 318,525 tonnes. The cash/threes spread stood at $6.50/9.50 backwardation.
"To some extent lead is decoupling compared with copper, which does look weak. It is tight - [there is] not a lot of metal around and the few funds who trade it are long," the trader said.
In other metals, zinc traded at $1,887, up $18 - there was a 925-tonne fall in stocks to 1,168,375 tonnes. Nickel rose to $16,033 from a previous $15,900, although inventories climbed 420 tonnes to 130,548 tonnes.
Tin was $228 higher at $20,328, with a 330-tonne stock fall to 11,705 tonnes seen, and steel billet was unchanged at $335/345. In the minors cobalt was indicated at $25,350/27,500, up slightly from yesterday's contract lows, while molybdenum was neglected.
(Editing by Mark Shaw)