LME MORNING - Base metals move off overnight closes in light end-week trading

By: Eddie van der Walt

London 23/08/2013 - Base metals firmed up in Friday morning LME trading but remain below the previous session's highs after optimism on better Chinese and global PMI numbers petered out.

"Improved economic data is a two-edged sword for commodities,” Credit Suisse said. "On the one hand, the data is supportive for cyclical markets including energy and industrial metals. On the other hand improved economic numbers pose a risk for interest rate sensitive markets."

The flash manufacturing PMI for Germany came in at 52.0 and the eurozone number was at 51.3, while their flash services PMIS were 52.4 and 51.0 respectively.

In the US, US initial claims for state unemployment benefits rose 13,000 to 336,000, above the 329,000 forecast but still near a six-year low, before the US flash manufacturing PMI came in at 53.9 for August, up from 53.7 previously but below the forecast 54.1.

In data published this morning, final second-quarter German GDP growth came in on target at 0.7 percent. Later today, the market awaits July US new home sales, which are forecast at 487,000.

The annual Jackson Hole Symposium of central bankers is taking place until tomorrow, but with the absence of European Central Bank president Mario Draghi, Federal Reserve chairman Ben Bernanke and Bank of England governor Mark Carney, it is unlikely to have market-moving impact.

In currencies, the dollar is effectively unchanged against the euro.

In the metals, copper led the way higher albeit in thin volumes. The red metal was last at $7,359 per tonne, up $39 or around 0.5 percent. By 10:00 BST, fewer than 6,000 lots had traded on Select.

Inventories continue their lower trend, falling a net 1,275 tonnes today to 564,225 tonnes, with cancelled warrants 1,600 tonnes lower at 292,850 tonnes.

Aluminium gained $5.25 to $1,889.25, with stocks falling 3,425 tonnes to 5,428,175 tonnes. Cancelled warrants decreased 5,225 tonnes to 2,033,500 tonnes.

Nickel is the biggest gainer, adding $120 or 0.8 percent to $14,550, although stocks increased 192 tonnes to 210,060 tonnes and cancelled warrants fell 480 tonnes to 39,576 tonnes.

Tin is $25 higher at $21,900, with stocks jumping 1,345 tonnes to 15,305 tonnes.

Zinc gained $5.50 to $1,979.50 and lead added $6 to $2,215. Zinc stocks fell 2,525 tonnes to 1,023,575 tonnes and lead stocks increased 1,225 tonnes to 187,850 tonnes

Steel billet was last quoted at a wide $120/201 but the minor metals were neglected.

(Editing by Mark Shaw)