London 06/03/2013 - Base metals fell back during Wednesday LME pre-market trading, with the complex again shrugging off upbeat trends in equity markets and a steady euro, focussing instead on slow offtake and caution ahead of Friday's key US employment report, traders said.
Lead and zinc both fell to fresh three-month and one-and-a-half month lows respectively, while aluminium hovered near its recent three-and-a-half month low-point. However, declines were fairly modest - copper, although softer, held comfortably above last week's three-and-a-half month lows.
"There is latent pent-up Chinese buying around, which will probably prove supportive without being overly bullish until we see fresh stimulus," LME RDM Sucden said.
Elsewhere, on Tuesday, US stock markets hit all-time highs, which pushed European shares to their highest for around four years this morning, while the euro was stable at some 1.3030 against the dollar. The metals, however, have largely been immune to this influx of optimism, given that share prices are viewed as leading indicators, and reflective of likely trends in nine months time
On the data side, current economic strains were highlighted by EU data, which showed that eurozone final quarter 2012 GDP contracted by 0.6 percent.
The main data event this week will be Friday's February US non-farm payroll numbers, which are expected to show 158,000 jobs were added, while the corresponding unemployment figure is expected to remain steady at 7.9 percent. A large deviation from these numbers could impact on market expectations for the longevity of the Fed's easing programme.
Today, the market gets a preview of this data, with payroll firm ADP releasing its non-farm numbers at 13:15 GMT. As well, January US factory orders are expected to show a decline of 2.2 percent, following an increase of 1.8 percent in December.
METAL INVENTORIES BUILDING
Warehouse inventory builds were seen in all the major base metals with the exception of tin, with copper stocks now up close to 50 percent this year.
Copper again faltered above $7,800 per tonne, then slipped to $7,730 per tonne, a $42 loss from the previous close. Warehouse inventories rose a net 775 tonnes to 473,750 tonnes, a fresh high since October 2011.
Aluminium dipped to $1,961, down $15, and not far off the recent low of $1,956. Inventories surged 25,225 tonnes to 5,187,925 tonnes, the highest for two months. Warrantings of 20,175 and 14,325 tonnes were seen in Singapore and Vlissingen respectively.
In others, zinc traded down to $1,986.25 its weakest since January 17 and a $20.75 loss. Stocks climbed 7,050 tonnes to a one-month high of 1,200,800 tonnes. Sister metal lead touched $2,207.75, its softest since December 12, then settled at $2,210, a $15 decline. Stocks rose 600 tonnes to 287,700 tonnes.
Nickel dropped $125 to $16,575 - stocks were up 474 tonnes at a new three-year peak of 161,022 tonnes. Tin was $45 lower at $23,405, while there was a small five-tonne fall in stocks to 13,480 tonnes.
Steel billet was neglected - on Tuesday the market traded at a contract low of $250. Stocks held unchanged for the 38th day in a row at 83,070 tonnes. Cobalt was quoted at $25,050/25,750, while molybdenum was ignored.
(Additional reporting by Eddie van der Walt)