London 26/11/12 - Base metals drifted routinely during Monday LME premarket trading, with the complex marking time ahead of the resumption of US markets later following the extended Thanksgiving holiday period, traders said.
“It is a bit busier than Friday but there is not that much going on. We are in a bit of a wait-and-see mode at present,” a trader said.
Overall, the complex continues to range, with a slight upside bias following the mini-rally late last week, although caution over eurozone sovereign debt issues and the fast-approaching US fiscal cliff prevails.
Eurogroup leaders will meet today to discuss new rescue funds for Greece, while talks between the White House and Congress on the budgetary fiscal cliff will begin in earnest later this week. In other markets, the euro was trading around 1.2960 against the dollar, having settled back from the six-week high of 1.2991 hit in the previous session.
The currency has been boosted by optimism that Greece will finally get the rescue funds it needs to avoid defaulting on its enormous sovereign debt. Finance ministers from eurozone member states are meeting today to discuss the conditions that will be attached the next tranche of emergency loans to Greece but German Chancellor Angela Merkel said the eurogroup was close to reaching an agreement.
Metals trade is likely to be patchy today, even though US markets will fully reopen later - there is no front-line data scheduled for release.
“With business conditions already slowing in the run-up to Christmas and year-end, markets are likely to be headline-driven until real fundamentals are established,” Sucden said.
“Traders will be seeking more evidence that China is not slowing down, more decisiveness in Europe regarding the sovereign debt issues, and further economic improvements in the US,” the LME ring dealer member added.
COPPER LACKS DRIVE
Copper business was confined to a narrow range, with the market not far off Friday’s close of $7,777 per tonne - recent trade was at $7,740. Warehouse stocks were unchanged at 249,825 tonnes. In the short term, the market is seen consolidating but with levels above $7,800 the upside technical target.
Aluminium rose to $1,993 from its Friday close of $1,983 - there was a net 325-tonne decline in warehouse stocks to 5,177,100 tonnes.
In others, zinc rose to $1,984 from the pre-weekend $1,961. Warehouse stocks were down 1,500 tonnes at 1,199,050 tonnes, while cancelled warrants - the metal booked for removal - rose to 591,350 tonnes, a fresh all-time high.
Lead advanced above $2,200 to $2,204 - on Friday it ended at $2,195. There was a modest 50-tonne fall in stocks to 361,475 tonnes. Nickel was at $16,690, a little above Friday’s close of $16,620. But inventories surged 834 tonnes to 134,646 tonnes, the highest since January 27, 2011.
Tin dipped to $20,775 from last week’s $20,850, while inventories were static at 11,740 tonnes. Steel billet was steady at $335/350 after inventories dropped 2,015 tonnes to 78,845 tonnes. The minor metals were neglected.
(Additional reporting by Greg Holt in Singapore, editing by Mark Shaw)