LME MORNING - Metals range narrowly, interest slow ahead of policy meetings

By: Martin Hayes

London 05/07/2012 - Base metals were restricted to a comfortable ranging pattern during Thursday LME pre-market trading, holding close to overnight levels with low-key turnovers and interest, traders said.

"They have basically just been flat-lining this morning so far - there were odd moments when they picked up a bit, but it is just 'thumb-twiddling' at the moment," a trader said.

The complex, like other financial markets, was marking time ahead of a string of macroeconomic events and data throughout the day. These include ECB and BoE monetary policy meetings and US jobs-related data that is a precursor to Friday's keynote data event - the June employment report.

The focus returns to European central banks today, with the BoE expected to announce a further 50 billion pounds ($78 billion) of asset purchases at noon local time, lifting the total to 375 billion pounds.

Just 45 minutes later, the ECB is thought likely to announce an interest rate cut of 25 basis points, which would bring the rate to 0.75 percent. This has been largely priced in by markets; any deviation is likely to lead to large currency moves, with resulting moves in metal prices.

The day will be data-heavy, with important reads on US employment due for release. Data from payroll firm ADP and the Bureau of Labour statistic's unemployment claims will both be closely scrutinised for clues on possible changes in non-farm payrolls, which are due out on Friday.

US unemployment has gained added significance - disappointment here is likely to be met with further monetary loosening by the Federal Reserve.


COPPER RANGING AROUND $7,700, ALUMINIUM INVENTORIES RISE

Copper was $20 higher at $7,745 per tonne, with a mini-run of warehouse stock falls continuing. Inventories were down for the fourth day in a row, falling a net 800 tonnes to 252,725 tonnes.

Aluminium was aimless, trading at $1,958, up just $2 from the previous close. Inventories climbed a net 3,750 tonnes to 4,809,525 tonnes, with big increases of 7,075 tonnes and 6,550 tonnes in Detroit and Singapore respectively offsetting the usual round of withdrawals.

Zinc business at $1,892 was $6 lower. Stocks climbed 1,775 tonnes to 993,375 tonnes, while there was a 2,100-tonne fall in cancelled warrants from Wednesday's all-time highs of 209,175 tonnes.

Sister metal lead dipped $5 to $1,901, with a modest 675-tonne inventory decline to 348,575 tonnes seen.

In other metals, tin was trading at $19,100, down $50, with stocks climbing 25 tonnes to 12,605 tonnes. Nickel moved back above $17,000 to trade at $17,032, up from the previous $16,930, with stocks falling 96 tonnes to 103,578 tonnes.

Steel was neglected, with inventories remaining at 28,145 tonnes, the level they have stood at since May 17.

In the minor metals, cobalt was quoted at $28,000/30,000 and molybdenum at $27,500/28,300.


(Additional reporting by Eddie van der Walt, editing by Mark Shaw)

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