London 18/07/2013 - Base metals mostly drifted lower in the LME premarket on Thursday, slipping as the dollar gained its footing after testimony by Federal Reserve chairman Ben Bernanke in Washington on Wednesday.
Most of the metals held near their closes, however, and the market has so far not seen any large changes in price.
"[Yesterday] the bellwether copper market led declines, with a 1.5 percent drop for three-month prices after US Fed Bernanke’s speech and then a further leg down after weaker-than-expected US building permits and housing starts," analysts at ANZ said.
The dollar has ticked slightly higher and was last around 1.311 against the euro.
Delivering his semiannual monetary policy report before the Senate banking committee, in Washington, Bernanke said that the Federal Reserve's asset purchase programme was "by no means on a preset course".
"If the subsequent data continued to confirm this pattern of ongoing economic improvement and normalizing inflation, we expected to continue to reduce the pace of purchases in measured steps through the first half of next year, ending them around mid-year," Bernanke said.
"Bernanke’s responses have been not been as dovish as the market expected following his testimony, highlighting how he is attempting to steer the market slowly towards tapering without causing panic selling," FastMarkets analyst Tom Moore said.
Bernanke's question and answer session continues in Washington today.
Meanwhile, concerns about metal demand from top consumer China mounted after the International Monetary Fund yesterday warned that downside risks to the country's economic growth outlook were increasing and urged China to follow through with policy reforms to support a sustainable expansion of the economy.
US data today includes weekly jobless claims, the Philly Fed manufacturing index and Consumer Board leading index.
Released earlier, the May eurozone current account came in at a surplus of 19.6 billion euros, down from 23.8 billion euros on the previous reading and below the expected 21.3 billion. June UK retail sales, rising 0.2 percent, were on target.
INVENTORIES MOSTLY LOWER
Copper was last down $1.25 at $6,888.75, and trade has been relatively uninspiring, with about 7,300 lots changing hands on Select by 10:00 BST.
Yesterday, the metal once again briefly regained the $7,000 level, but it soon succumbed to selling pressure.
Warehouse inventories of the metal declined by a net 625 tonnes to 640,600 tonnes with the largest outflow, 250 tonnes, occurring in Johor. Cancelled warrants increased by 1,325 tonnes to 336,600 tonnes.
Aluminium was down $1.25 at $1,803, even though stocks declined by 6,550 tonnes to 5,479,550 tonnes. Detroit shed 3,125 tonnes of material. Cancelled warrants were 8,975 tonnes lower at 2,190,375 tonnes.
Zinc was unchanged at $1,854 per tonne, but inventories were 1,600 tonnes lower at 1,075,625 tonnes, with 525 tonnes leaving Vlissingen. Cancelled warrants increased by 3,650 tonnes to 655,575 tonnes.
Sister metal lead slipped $6 lower to $2,024 per tonne. Warehouse stocks declined by 400 tonnes, all of it leaving Port Klang, Malaysia, with the total now at 196,475 tonnes. Cancelled warrants fell by the same amount, taking the metal booked for removal to 107,575 tonnes.
Tin was down $65 at $19,406 and inventories fell by 60 tonnes to 14,245 tonnes. Cancelled warrants were 770 tonnes lower at 4,530 tonnes.
Nickel, last at $13,962, down $8, was the only metal to see inventories rise, with the total of 196,170 tonnes up 396 tonnes - 744 tonnes were warranted in Johor. Cancelled warrants were down 306 tonnes at 26,268 tonnes.
Steel billet was last quoted at $125/180 per tonne, and stocks fell by 2,145 tonnes - 2,015 tonnes leaving Antwerp - to 69,615 tonnes, bringing the total to the lowest level since January 11.
In the minor metals, cobalt was quoted at $29,200/29,500 with stocks climbing one tonne to 322 tonnes and cancelled warrants down two tonnes to 137 tonnes. Molybdenum was neglected, with stocks unchanged.
(Editing by Martin Hayes)