LME CLOSE - Base metals end mostly lower, copper fails to hold $5,000/t

print Print this document.  Post this story to Facebook.
Ewa Mantheyewa.manthey@fastmarkets.comCorrespondent+44 (0) 20 7337 2146

London 03/05/2016 - Base metals - apart from nickel and tin - ended lower on the LME on Tuesday, with copper failing to hold above $5,000.

Metal prices had pushed higher towards the end of last week, with the LME base metal index hitting a six-and-a-half-month high.

But a correction was on the cards because the move was speculative and not an accurate reflection of demand, market participants said.

Positive sentiment was eroded today by disappointing Chinese data releases over the weekend and overnight, a trader noted.

The April Caixin manufacturing PMI at 49.4 was below the forecast of 49.8 and March's reading of 49.7. The official manufacturing PMI was also weaker at 50.1 although it managed to hold above 50.

"The fluctuations indicate the economy lacks a solid foundation for recovery and is still in the process of bottoming out. The government needs to keep a close watch on the risk of a further economic downturn," He Fan, chief economist at the Caixin Insight Group, said.

Meanwhile, the IMF trimmed its forecast for economic growth in Asia, projecting the region to expand by 5.3 percent in 2016-17, down from 5.4 percent in its October forecast.

From the US today, IBD/TIPP economic optimism at 48.7 was better than the expected 46.6. The focus will now turn to Friday's US April employment report.

In currencies, the dollar continues to weaken - the dollar index was last at 92.90, around the lowest it has been since January 2015.

In the metals, copper concluded at $4,921 per tonne, down $129 on Friday's close. Volumes were robust - more than 25,000 lots changed hands on Select by the kerb close.

Stocks increased a net 5,175 tonnes to 154,675 tonnes due predominantly to arrivals in Busan and Kaohsiung. But cancelled warrants were also higher at 36,350 tonnes, with 2,500 tonnes freshly cancelled in Singapore.

Market participants have attributed the moves to competing trading houses taking different views on the market.

Aluminium made a strong start, peaking at $1,684.50, but it concluded at $1,634, down $45. More than 24,000 lots changed hands by the close.

Stocks fell 6,650 tonnes to 2,639,075 tonnes while cancelled warrants dropped 44,350 tonnes to 1,172,650 tonnes after 37,700 tonnes were put back on-warrant in Vlissingen.

The benchmark cash/threes was last at a contango of $16.75, having closed on Friday at $1.

Nickel hit a fresh November high at $9,700 and was last at $9,520, still up $75. Stocks edged 66 tonnes higher to 417,504 tonnes while cancelled warrants at 129,366 tonnes were 4,260 tonnes higher after increases today in Kaohsiung and Rotterdam.

Lead closed at $1,765.50, down $39.50; stocks and cancelled warrants both fell 700 tonnes to 174,325 tonnes and 78,250 tonnes respectively. Spreads have tightened - cash/threes was at a backwardation of $0.50 while cash/May is at $4.

Zinc ended at $1,897/1,899, a drop of $41.50; stocks fell 2,475 tonnes to 401,800 tonnes, their lowest since July 2009.

Tin at $17,270 was $50 higher even after stocks rose 115 tonnes to 5,690 tonnes.

Steel billet was last indicated at $65/115 and cobalt and molybdenum at $23,000/23,500 and $13,300/13,800 respectively.


(Additional reporting by Kathleen Retourne and Tom Jennemann, editing by Mark Shaw)



Fastmarkets.com
mailto:press@fastmarkets.com
8 Bouverie Street, London, EC4Y 8AX, UK
+44 (0)845 241 9949