London 22/07/2013 - Base metals moved higher during Monday LME pre-market trading, underpinned by a steadier euro and an uptick in optimism over Chinese economic prospects after growth-friendly monetary measures this weekend, traders said.
Business was low-key, however, with further direction likely to hinge on a series of global PMIs due for mid-week release. On Wednesday, China's HSBC PMI will be released, to be progressively followed by French, German, eurozone and US readings.
"It is a bit more 'risk-on' today, but, apart from nickel, there is not a lot of significant movement going on - just ranging higher," a trader said.
Copper led the way higher in the complex, gearing up for yet another test of the $7,000 per tonne level that prices have see-sawed around recently, while nickel's more positive charts lifted prices to their highest since mid-June.
The catalyst for the gains came from the euro, which rose to around 1.3060 against the dollar, as well as pre-weekend news that the People's Bank of China announced measures to liberalise interest rates in order to boost economic growth.
"This move was seen by market participants as another step forward towards financial liberalization, which could help stabilize growth in China and keep the Chinese imports resilient," broker Credit Suisse said.
Over the weekend, the G-20 nations released a joint statement following their meeting in Russia to endorse continued government spending to support the full recovery of the global economy.
It also added that the US and Japanese economies were strengthening, while growth slowed in emerging markets and the eurozone remained mired in recession.
The data stream is light today, which suggests that business will remain slow this afternoon - US existing home sales figures is the sole release.
COPPER INVENTORIES FALL TO ONE-MONTH LOW
Copper came within $8 of regaining the $7,000 per tonne level yet again, trading recently at $6,982, up $67 from Friday's kerb close. Warehouse inventories fell by a net 3,675 tonnes to 634,650 tonnes, a one-month low.
Aluminium was $15 higher at $1,839 - stocks were down for the third day in a row by 8,575 tonnes at 5,469,150 tonnes. But this is still just 16,950 tonnes under the all-time highs set last week.
Nickel maintained Friday's technical advances, trading at a one-month high of $14,320, before settling back at $14,231, up $71. However, inventories jumped a hefty 3,760 tonnes to an all-time peak of 199,782 tonnes, due to warrantings of 1,410 tonnes and 2,700 tonnes respectively in Johor and Rotterdam.
In others, lead at $2,042 was $9 higher, although stocks were up 1,500 tonnes at 197,975 tonnes. Sister metal zinc traded at $1,874, up $10 - inventories fell by 4,000 tonnes to 1,067,625 tonnes.
Tin at $19,460 was $60 higher - stocks climbed 20 tonnes to 14,265 tonnes. Steel billet was neglected, but stocks were down 2,340 tonnes at a six-month low of 64,935 tonnes.
Cobalt and molybdenum were also neglected, although inventories of the former were up three tonnes at a three-month high of 476 tonnes.
(Additional reporting by Yoke Wong, editing by Eddie van der Walt)