London 13/03/2013 - Base metals were sideways-to-higher during Wednesday morning trading sessions, given a little impetus by short-covering and technicals but expected to remain in recent ranges.
“We should not get too comfortable with the stronger tone in base metals - there may be some further short-covering to be done but overall we would expect to see range-trading now,” FastMarkets analyst William Adams said.
“This still appears to be more of a technically driven bounce and we expect that continued uncertainty about growth in China and credit concerns in Europe will probably still see rallies getting sold in the short term,” RBC Capital Markets said.
Still, the mood is more upbeat than it was yesterday thanks to a spillover effect from rising equity markets, analysts said.
“The trading pattern on the financial markets remained much the same yesterday, though in reverse: while equity markets were unable to gain and the US dollar appreciated slightly, commodity prices rose,” Commerzbank said.
“Evidently the lower prices were seen as an attractive opportunity to buy. So far this morning, metal prices are defending the levels they gained yesterday or are continuing to make moderate gains,” it added.
In data released so far this morning, European numbers have done little for the outlook there - the French consumer price index was below expectations at 0.3 percent and the fourth-quarter non-farm payrolls for the same country fell 0.3 percent quarter-on-quarter.
US numbers due for publication later include core retail and retail sales, import prices and business inventories.
METALS IN DEFENSIVE MODE
Copper at $7,826 per tonne was down $4 on the previous day’s close. Inventories rose for a 20th consecutive day, jumping a net 33,350 tonnes to 520,500 tonnes.
Since March 7, inventory levels at Johor and New Orleans have steadily risen to 94,000 and 147,200 tonnes respectively, up 6.8 and 6.0 percent over the past seven trading days. Total cancelled warrants slipped 50 tonnes to 33,350 tonnes.
Aluminium was up $3.75 at $1,985.75 after stocks dropped 1,450 tonnes to 5,180,975 tonnes although cancelled warrants at 1,863,875 tonnes were down 8,950 tonnes.
Zinc at $1,999.50 was $14.50 higher after stocks fell 1,125 tonnes to 1,208,425 tonnes and cancelled warrants fell 3,575 tonnes to 594,775 tonnes. Lead was $8.25 higher at $2,243.25 - stocks and cancelled warrants both fell 1,900 tonnes to 281,400 tonnes and 152,600 tonnes respectively.
Nickel gained $55 to $17,085 - stocks fell 270 tonnes to 161,046 tonnes but cancelled warrants dropped 516 tonnes to 29,496 tonnes. Tin at $23,900 was $25 higher, although stocks rose 40 tonnes due to arrivals in Singapore. Cancelled warrants edged five tonnes higher.
Steel was bid but not offered at $330, with stocks unchanged for the 43rd consecutive day. In the minor metals, cobalt was indicated at $24,975/25,750 and molybdenum was offered at $24,200.
(Additional reporting by Eddie van der Walt, editing by Mark Shaw)