London 04/03/2013 - Base metals were content to tread water on Monday morning, starting the week little changed from Friday’s closing levels.
Wider markets were still under pressure from the recent souring in sentiment, while in currencies the euro was swinging each side of a soft 1.30 against the dollar.
A slew of poor data from China and the eurozone last week drove base metals further into negative territory - many hit fresh multi-week lows on Friday, with key support levels taken out while traders dropped risky assets.
“Metal prices have still been unable to recover from the considerable losses they suffered at the end of last week as the new week of trading gets underway,” Commerzbank said. “Very weak Chinese equity markets are weighing on the metal prices - measured against the CSI 300, they have shed 4.6 percent today.”
Data from the eurozone was mixed on Monday. The Spanish unemployment change at 59,400 beat the expected 77,500 and the previous 132,100 while the eurozone PMI was also positive at 0.6 percent against the expected 0.5 percent. But Sentix investor confidence at -10.6 undershot the forecast of 4.5.
Eurogroup finance ministers will meet in Brussels today and on Tuesday - discussions are likely to focus on the structure of the Single Supervisory Mechanism (SSM) for eurozone banks. The bailout for Cyprus is also expected to be high on the agenda - there are concerns that the struggling country would not be able to repay a bailout.
With no data releases scheduled from the US, the rest of the day is expected to be news- and currency-led.
Copper traded at $7,710 per tonne, up $10 on Friday’s close. Continuing the theme from last week, volumes have been robust, with 11,800 lots changing hands on Select by 10:30 GMT.
Inventories rose for the 13th consecutive day, up a net 3,625 tonnes to 462,400 tonnes to the highest since October 10, 2011. Busan, Johor and New Orleans stocks rose 300 tonnes, 1,525 tonnes and 1,975 tonnes respectively. Total cancelled warrants fell 125 tonnes to 24,875 tonnes.
Aluminium was $3 lower at $1,972 despite a 9,675-tonne drop in stocks to 5,162,875 tonnes, with no locations posting increases today. Cancelled warrants fell 13,950 tonnes to 1,916,900 tonnes.
Nickel, which was the only metal to close positively on Friday after talks of Chinese buying, has succumbed to the downturn in sentiment - it was last at $16,596, down $4. Inventories rose 1,104 tonnes to 160,656 tonnes, the highest since March 5, 2010 - Johor was responsible for the move higher, with inventories there rising 1,296 tonnes to 40,470 tonnes.
Tin at $23,198 was $52 lower, with stocks unchanged at 13,575 tonnes. Lead was last at $2,234 was down $10, with stocks and cancelled warrants both down 50 tonnes at 287175 tonnes and 149,500 tonnes respectively.
Sister metal zinc at $2,015 was $6 lower even after a three-day run of stock increases ended - inventories dropped 1,750 tonnes to 1,198,300 tonnes today. Cancelled warrants climbed 575 tonnes to 622,675 tonnes. But technical selling remains a feature of the market, reflected in strong volumes on Select, with 5,860 lots changing hands so far.
Steel was last offered but not bid at $330. In the minor metals, cobalt last traded at $25,000 while molybdenum was offered at $26,500.
(Editing by Mark Shaw)