London 21/10/2011 - Base metals rebounded after yesterday's sell-off on Friday, with the market awaiting with increasing interest this weekend's EU summit to discuss possible solutions to the eurozone debt crisis.
Volatility and choppy trading is, however, expected throughout the day and in the run-up to EU bailout announcements.
“Friday should prove to be a very volatile day as many players will look to square books up before the weekend summit between European leaders who will meet to hash out a plan to solve the crisis,” RBC said.
Economic sentiment remains, dour with predictions that the crisis strategy meeting on Sunday will see little in the way of a workable plan to save Europe.
Politicians are already struggling to agree on the size of the bailout fund, with French president Nicolas Sarkozy and German chancellor Angela Merkel in disagreement of its total.
A further euro crisis summit has since been called, scheduled for Wednesday next week. It will allow Germany the time to approve any changes to the fund and will also provide the platform for any strategy announcements.
The euro, which has had a bumpy week, is currently at 1.3775 against the dollar.
INVENTORIES DOWN, COPPER STOCKS AT SIX-MONTH LOW
Copper has managed to scrape above the $7,000 per tonne level to trade at $7,027.50, up $292.50 on Thursday’s close.
Warehouse stocks were depleted further, dropping a net 3,050 tonnes to 447,800 tonnes, their lowest since April 12, while cancelled warrants increased 13.7 percent to 7,275 tonnes, potentially providing support for prices.
Nickel inventories at 86,820 tonnes were at their lowest since February 20, 2009, falling a net 1,668 tonnes, although cancelled warrants dropped 2,022 tonnes to 4,410 tonnes. At $18,409, the metal was $384 higher.
Zinc rose $42 on Thursday’s close to $1782, while stocks fell 2,550 tonnes to 790,100 tonnes - a level not seen since April 19.
Aluminium, which had fallen to a 14-month low yesterday, is up $34 at $2,119. Inventories were down 4,900 to 4,564,975 tonnes, while cancelled warrants were also down, losing 5,850 tonnes to 226,650 tonnes.
Lead was the only metal to show an increase in stocks, albeit only a small one of 25 tonnes, which lifted the total to 387,950 tonnes. Cancelled warrants, meanwhile, were up 6,525 tonnes to 12,000 tonnes, the highest since September 8. Business at $1,834 increased $44.
Tin inventories slipped 300 tonnes to 17,500 tonnes, a level not reached since January 24. Cancelled warrants fell 170 tonnes to 3,125 tonnes. At $21,800, prices jumped $500 or around 2.4 percent.
Steel was quoted at $530/538, while in the minor metals cobalt was quoted but not bid at $33,000 and molybdenum was neglected.
(Editing by Mark Shaw)