LME MORNING - Base metals make subdued start to week, price little changed while Asia closed for holidays

By: Kathleen Retourne

London 11/02/2013 - Base metals were content to tread water on Monday morning, with prices hovering around Friday’s closing levels in holiday-thinned trading conditions.

Asian markets will all be closed at the start of this week, while in China itself exchanges there will be officially closed over February 9-15.

"Prices should remain sideways and rangebound due to the Chinese holidays, although data from the US later this week could provide some direction," a trader said.

“With most of Asia closed today, we are off to a quiet start,” FastMarkets analyst William Adams said. "Metal prices have been firm and are well placed to push higher on the charts, but we expect overhead supply to emerge as prices approach previous resistance levels and that might well prompt some profit-taking."

In currencies, the euro, which was battered on Thursday after ECB president Mario Draghi said on Friday that risks to the bank's outlook on the eurozone remain to the downside, was still struggling around 1.3395 against the dollar - it fell to 1.3350 on Friday, its lowest since January 25.

In today's data, French industrial production growth in December at -0.1 percent beat the forecast 0.3 percent but the number had little impact on the market.

Otherwise, the slate is quiet today, with no US releases due later in the session - developments are expected later this week, however.

"Looking ahead, the G-20 Finance Ministers and Central Bankers meeting on Thursday and Friday will be closely watched, with global ‘currency wars’ expected to be a key focus," broker ANZ said.

In the metals, copper at $8,280 per tonne was down $9 on Friday’s close, with around 950 lots changing hands by 10:20 GMT.

It enjoyed strong investor interest the week ended February 5, Standard Bank said. Net speculative length grew a massive 77.4 tonnes, the strongest increase since early December.

Inventories halted their four-day gain, slipping a net 50 tonnes to 399,775 tonnes, while cancelled warrants - metal booked for removal - were down 475 tonnes at 31,700 tonnes.

Aluminium was $5 higher at $2,124, with the June/July forward spread last in a backwardation of $12.50. Inventories and cancelled warrants were both down 8,775 tonnes at 5,150,150 tonnes and 2,002,725 tonnes respectively.

Nickel edged $4 higher to $18,319, shrugging off a further stock increase. Inventories rose 1,296 tonnes to 153,696 tonnes, the highest since April 13, while cancelled warrants dropped 192 tonnes to 23,904 tonnes.

Lead was down $3 at $2,419 after stocks and cancelled warrants both slipped 100 tonnes to 288,000 tonnes and 152,950 tonnes respectively. Zinc at $2,210 was $5 higher; while volumes on Select were small at 1,478 lots, it is the busiest contract so far today.

Tin at $24,837 slipped $13 - stocks rose 55 tonnes to 13,365 tonnes and cancelled warrants fell 10 tonnes to 2,230 tonnes.

Steel was unchanged at $300/340, while in the minor metals cobalt was indicated at $25,000/26,500 and molybdenum was neglected.


(Additional reporting by Martin Hayes, editing by Mark Shaw)

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