London 02/05/2012 - Base metals generally favoured easier levels during Wednesday LME pre-market trading, amid a downbeat mood, undermined by a slide in the euro after negative eurozone economic data.
The eurozone manufacturing PMI came in at 45.9 in April against a forecast and previous 46.0, while there was a rare increase in German unemployment in March. The euro, which has ranged narrowly above 1.3200 against the dollar in recent sessions, subsided to some 1.3160.
Traders said that losses were nevertheless relatively contained, and the market is now showing signs of becoming locked into a broad sideways pattern, as the impetus from last week's gains fades.
"The rebounds across the metals generally halted yesterday and some are showing some weakness this morning, but it is too early to say whether prices are just pausing for breath or have run out of steam," William Adams of Fastmarkets said.
Trends in other centres after the Labour Day holiday closures provided little incentive, either, wlth China's SHFE unresponsive. So far, also, the new month has seen little in the way of fresh investment money allocations.
"With the market continuing to consolidate after last weeks run-up we expect any serious money will wait till after Friday's [US] employment report before committing itself to the market," broker RBC said.
Data flows this week have concentrated on manufacturing indicators - China and the US. But attention has switched to the labour market now - specifically the US April non-farm payrolls report which will be released on Friday.
Today, there is a fore-runner to this key indicator, which often results in increased volatility. The US April ADP Non-Farm Employment Change, alongside factory orders for March, are due for release this afternoon.
COPPER INVENTORIES STILL FALLING
Copper was mostly struggling under the $8,400 per tonne level, but is seen within a broad $8,350-8,500 range still. Business at $8,388 was down $52 from the previous close. Warehouse stocks fell again - down a net 2,600 tonnes at a new 40-month low of 238,950 tonnes.
In the spreads 'TOM/next' (tomorrow/next day) traded at $13 backwardation, having hit $21 on Tuesday, while May/June traded at $19 premium, close to yesterday's $20.
Lead dropped $15 to $2,165, having hit its highest since mid-March yesterday above $2,180, with the recent run of stock drawdowns and cancellations coming to a brief halt. Stocks rose 1,500 tonnes to 361,000 tonnes, all registered in Barcelona. Cancelled warrants rose by just one lot or 25 tonnes to a new record of 86,875 tonnes.
In the spreads, the June/July period, where tightness has been evident in recent days, was level.
In other metals aluminium was unchanged at $2,123. Stocks climbed 1,000 tonnes to 5,015,500 tonnes, with a raft of withdrawals offset by a 10,775-tonne warranting in Vlissingen. Zinc was also unchanged at $2,053, but stocks continue to build - up 2,325 tonnes at a new 17-year peak of 928,875 tonnes, with more metal warranted in New Orleans.
Nickel traded at $17,783, against a previous $17,700 - there was a one lot or six-tonne decline in stocks to 103,896 tonnes. Tin was $50 higher at $22,600 after a 25-tonne stock fall.
Steel billet was again stable at $490/502, with no inventory movement seen for the second day in a row. In the minors, both cobalt and molybdenum were steady at $30,000/30,800 and $30,000/31,500 respectively.
(Editing by Perrine Faye)