London 17/07/2012 - Base metals were mixed during Tuesday LME pre-market trading, moving off the lows as the euro nudged up. But prices remained compressed within compact neutral bands ahead of key testimony from Fed chief Ben Bernanke later.
Overall, the complex was in a subdued mood, reflecting current short-term uncertainty, wider downbeat macroeconomic sentiment and lack of incentives, although analysts see monetary easing opportunities.
"The metals seem well placed to test higher on stimulus talk but, given that economic data has tended to be weak, there is considerable room for disappointment should the Fed and China decide to sit on the fence longer," William Adams of FastMarkets said.
In other markets this morning, equities were largely steadier, while the euro nudged higher to around 1.2295 against the dollar.
For today, the focus will be on Bernanke's testimony later. Markets are waiting to see whether the head of the US central bank will hint at additional stimulus measures in his two-day testimony before Congress later today, following weaker-than-expected retail sales data on Monday.
As well, the IMF's latest downbeat outlook on global growth prospects, unresolved eurozone sovereign debt problems and the slower summer period for industrial demand are all keeping interest and activity slow.
"These are the pretty well-documented issues that face investors and one reason that markets are being held in a range," a trader said.
On Monday, the IMF cut its 2012 global growth forecast to 3.9 percent from the April estimate of 4.1 percent. The IMF also said that the production capacity of emerging economies such as China, India and Brazil was not as strong as previously expected and could weigh on future growth estimates.
"Low prices and poor data raise the spectre of further easing, but market spikes are held in check because it is hard to see any part of the world providing much in the way of growth," the trader added.
Later today on the US data side, releases include the July NAHB housing market index, June figures on CPI and industrial production, the June capacity utilisation rate, and May TIC long-term purchases.
ZINC INVENTORY SWELLS TO 17-YEAR HIGHS, PRICES DIP
Zinc was struggling below $1,900, trading at $1,886 per tonne, down $14 from the Monday close. The market saw another big inventory increase - stocks rose a net 8,575 tonnes to 996,725 tonnes, the highest since April 1995.
This partly reflected 'third Wednesday' warranting, with 12,875 tonnes put on warrant in New Orleans - the two-day increase here stands at 28,650 tonnes.
Aluminium shrugged off a stocks increase and traded at $1,919, up $1. Inventories were up 6,625 tonnes at 4,806,475 tonnes, with 13,625 tonnes warranted in Detroit.
Copper was fluctuating around $7,700, trading recently at $7,695, a $5 advance. Inventories, however, climbed 1,275 tonnes to 252,900 tonnes, with inflows in a variety of locations.
In other metals, lead was $3 higher at $1,903 - there was a modest 200-tonne increase in stocks to 343,175 tonnes. Nickel business at $16,194 was $56 lower although stocks dropped 132 tonnes from what were six-week highs to 106,998 tonnes.
Tin was $150 higher at $18,900, with stocks down 140 tonnes at a four-month low of 11,955 tonnes. Steel billet was unchanged at $400/420 - stocks climbed 975 tonnes to 43,860 tonnes, the highest since March 29.
In the minors, cobalt was indicated at $27,500/28,250, while molybdenum was indicated at $27,000/29,500.
(Editing by Mark Shaw)