LME MORNING - Base metals mixed in data heavy morning

By: Eddie van der Walt

London 16/07/2013 - Base metals are mixed in morning trading on the LME on Tuesday, with the market waiting for direction from the wealth of data scheduled for release today and from Federal Reserve chairman Ben Bernanke, who will be delivering testimony to Congress tomorrow.

"For now the metals remain in consolidation mode, the base metals started to look a bit heavy yesterday, but underlying tails on yesterday’s candlesticks suggest there is buying interest into dips and that seems to be giving some lift now," FastMarkets analyst William Adams said. "For the most part we see the metals as being rangebound and they may well remain so until they hear what Fed Chairman Ben Bernanke says on Wednesday." 

Metal prices slipped in the previous session after top metals consumer China released a string of generally bearish data. The country's second-quarter GDP growth and June industrial production results both came in below analyst forecast, but the market found support from better-than-expected June retail sales figures.

US economic indicators were mixed, with June retail sales growth coming in below the forecast of analysts at 0.4 percent but the July Empire State Manufacturing Index coming in well above expectations with a reading of 9.5.

Today is again data-heavy. So far, Italy posted a positive trade balance at 3.90b against the forecast 2.14B. German ZEW economic sentiment at 36.3 disapointed, but ZEW sentiment for the eurozone as a whole was positive at 32.8.

Eurozone CPI and core CPI were both as expected at 1.6 percent and 1.2 percent respectively. Finally EU trade balance disappointed at 14.6B.

Later, in the US, CPI, TIC long term purchases, industrial production, capacity utilisation and NAHB housing market index are due out.

"US inflation data and Fed chairman Bernanke’s testimony should be more important catalysts for the asset class this week," analysts at Credit Suisse said.

The dollar was somewhat weaker against major currencies, falling to 1.3071 against the euro. And in equity markets, the Nikkei closed up 92 points at 14,599 after yesterday's one-day holiday in Japan. The Hang Seng was last up 45 points at 21,349.

In Europe, the FTSE 100 is down fractionally at 6,584 and the German DAX fell two fifths of a percent to 8,203.

"THIRD WEDNESDAY" JUMP IN ALUMINIUM STOCKS

Copper was last up $30 on Monday's close at $6,950 per tonne, with just about 6,150 lots changing hands by 10:20 BST. Inventories increased by 3,975 tonnes to 641,825, with a net 4,050 entering New Orleans. Cancelled warrants increased by 3,100 tonnes to 336,475 tonnes.

Aluminium fell below $1,800 and was last down $9 at $1,795 per tonne, as stocks increased by an impressive 62,650 tonnes to 5,472,700 tonnes.

Detroit accepted 31,125 tonnes of material and Vlissingen 35,075 tonnes. The increase can probably be attributed to warranting against "Third Wednesday" which takes place tomorrow. Cancelled warrants fell by 8,700 tonnes to 2,199,400 tonnes.

Zinc is down $12.25 at $1,879.75. Inventories are relatively stable, declining just 1,325 tonnes to 1,001,325 tonnes. Zinc stocks are now at the lowest level since October 9, 2012. Cancelled warrants decreased by 3,900 tonnes to 656,150 tonnes.

Sister metal lead is also lower, falling $7.50 to $2,047.50 per tonne. Inventories were unchanged.

Nickel climbed $33 to $13,538 per tonne with stocks fell by 234 tonnes to 196,074 tonnes. Tin is down $79 at $19,311 per tonne. Inventories fell by 80 tonnnes to 14,355 tonnes and cancelled warrants are 30 tonnes lower at 5,310 tonnes.

Steel billet was quoted at a wide $125/200 with stocks falling by 845 tonnes to 73,840 tonnes. Cancelled warrants fell by the same amount taking the total to 57,850 tonnes.

In the minor metals, cobalt is quoted at $28,500/30,200, but molybdenum is neglected. Stocks in both metals were unchanged.

(Editing by Kathleen Retourne)

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