LME MORNING - Base metal prices mixed, lack of interest weighs

By: Kathleen Retourne

London 05/08/2013 - Base metals were mixed in Monday's premarket, struggling to muster much any enthusiasm to tackle resistance in unexceptional trading.

"Metal prices have initially interrupted their upswing as the new week gets underway and have fallen slightly. Several base metals are all hovering at around psychologically important thresholds," Commerzbank said in a note.

"There seems a lack of interest in chasing prices higher so overhead resistance seems formidable," FastMarkets analyst William Adams said.

Trading is likely to remain seasonally sluggish at least until Thursday when China, the world's second-largest metals consumer, is set to release a slew of data.

"Retail sales data, industrial production and new yuan loans are on the menu. We would expect a marginally higher print for industrial production in July relative to June, in line with the marginally improved manufacturing data seen during July," broker Standard Bank said.

In data released earlier today, the eurozone final services PMI for July came in as expected at 49.8, slightly above the forecast 49.6, retail sales -0.5 percent beat the predicted -0.6 percent but were down from 1.1 percent in the previous month. Sentix investor confidence at -4.9 was far below the expected 9.8, though.

Global PMIs came in better than expected late last week, giving the market a boost, but US non-farm payrolls disappointed on Friday at 162,000 jobs created in July against a forecast 184,000.

In the metals, copper continues to hover around $7,000 - it was last at $7,007 per tonne, up $2. Inventories fell the 14th consecutive day, dropping a net 2,250 tonnes to 606,900 tonnes, while cancelled warrants rose 7,300 tonnes to 324,300 tonnes after a large inflow to Johor.

"However, the arbitrage between Shanghai and LME prices appears to have fallen, which could be bearish for Chinese July preliminary import data released this Thursday," ANZ said in anote.

Aluminium at $1,809.75 was up $0.75. Stocks slipped 5,700 tonnes to 5,466,675 tonnes and cancelled warrants lost 4,825 tonnes to 2,118,025 tonnes.

In the forward spreads, the Dec13-Dec14 contango moved to $95 from $102 last week.

"[The tightness is] not enough to entice forward buyers yet," Triland said. "The consumers continue to wait for lower prices, while this level is too low for any producer selling (unless they're really desperate)."

Zinc was up $4 at $1,871 even after stocks jumped 17,000 tonnes to 1,058,400 tonnes after a 19,875-tonne increase in Antwerp, where total stocks now stand at 197,100 tonnes. Cancelled warrants fell 3,375 tonnes to 608,000 tonnes.

Lead gained $4.50 to $2,128.50, with stocks and cancelled warrants both 350 tonnes lower at 199,775 tonnes and 107,200 tonnes respectively.

Nickel broke above $14,000 to peak at $14,011 before stepping back to $13,964, still up $31. Stocks halted five consecutive days of increases, down 126 tonnes to 204,210 tonnes. Tin at $21,000 was down $125 despite a 65-tonne slide in inventories to 13,845 tonnes.

Steel was indicated at $120/198 - inventories and cancelled warrants both slipped 2,080 tonnes to 45,955 tonnes and 31,005 tonnes respectively.

In the minor metals, cobalt was indicated at 25,000/27,200 - stocks jumped 20 tonnes to 502 tonnes and cancelled warrants fell four tonnes to 133 tonnes.  Molybdenum was neglected.


(Editing by Mark Shaw)

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