London 24/07/2013 - Base metals reversed direction during Wednesday LME pre-market trading, with most erasing earlier losses as a run of mostly positive European PMI readings partly offset the negative Chinese reading seen in Asia, traders said.
Copper again led the way higher, picking up renewed support on sub-$7,000-per tonne dips, and set a fresh one-month high. A steadier euro provided impetus as well, with the currency touching a new one-month peak of 1.3255 against the dollar at one stage
"The metals have been on an upward tack of late and even the worse-than-expected Chinese PMI data has not dented that too much, at least not yet. Indeed, the dips following the Chinese data seem to be attracting buying so we may well see the rebounds continue," William Adams of Fastmarkets said.
In Asia, the much-anticipated HSBC PMI number came in at 47.7, down from 48.2 in June and below the forecast 48.6. This is its worst reading since at least February 2011, and is the third consecutive negative read.
Subsequent European PMIs were more constructive - in France it was 49.8, considerably better than the forecast 48.9, but still in contracting mode, as a number below 50 separates expansion. The German PMI was 50.3, against a predicted 49.3, while the eurozone as a whole was 50.1, again better than the forecast 49.1.
Attention now focuses on the US PMI due this afternoon, which is seen coming in at 52.5.
COPPER COMFORTABLE ABOVE $7,000, INVENTORIES FALL AGAIN
Copper rose as high as $7,087.25 per tonne, its best since June 18, then settled at $7,076, up $37 from the Tuesday kerb close. Warehouse stocks fell for the sixth day in a row, with the net 4,375-tonne decline bringing the total down to a five-week low of 627,675 tonnes.
Aluminium cut losses to trade at $1,844, down just $1, with prices consolidating under the one-month highs of $1,863 set on Monday. Stocks fell 6,200 tonnes to 5,460,300 tonnes.
Nickel was $41 higher at $14,171, with the market now stalling after the recent technical rally to one-month highs. Stocks fell 486 tonnes from what had been all-time highs to 199,848 tonnes.
In others, lead traded at $2,067, up $12 - stocks were unchanged at 198,775 tonnes. Sister metal zinc rose $9 to $1,896, with a 4,175-tonne fall in stocks to 1,059,650 tonnes. Tin at $19,450 was just $5 lower - stocks climbed 15 tonnes to 14,315 tonnes.
Steel billet was neglected, while inventories fell 2,080 tonnes to a new six-month low of 62,465 tonnes. Cobalt was quoted at $28,300/29,500, while molybdenum traded at $20,000.
(Editing by Eddie van der Walt)