London 18/02/2016 - Base metals finished Thursday LME trading much as they started it following a somewhat lacklustre session in which fresh direction was conspicuously lacking.
"Metals have been stuck in a sideways trading range for most of the week, mainly driven by equities and oil markets," a trader said
"The fundamental picture still remains the same - the global economy is worrying, markets are oversupplied and money doesn’t seem to be going into commodities any more," he added.
Today's data was mixed with a slight negative bias. China's January PPI was -5.3 percent, a gentler decline than the forecast -5.5 percent and December's -5.9 percent. January was the 47th straight month of decline, however.
Weekly US unemployment claims came in at 262,000, below the forecast of 275,000 and under the psychological 300,000 mark. The Philly Fed manufacturing index for February at -2.8 was close to the -2.9 estimate.
But the CB leading index disappointed at -0.2 percent against a forecast of -0.1 percent.
There was caution too from the Federal Reserve. In its latest economic assessment yesterday, several members identified dovish factors in the form of weakening growth in emerging markets and instability in global equity markets.
The committee is likely to struggles to lift interest rates to the two-percent target set in December - markets do not expect another increase until the second half of 2017.
"The overall committee appears to have adopted a 'wait-and-see' attitude, one that precludes any further tightening of policy in the near term," James Steel, an analyst at HSBC, said. "Rate hikes may be postponed for a more extended period unless downside risks diminish in coming weeks."
In the metals, copper closed at $4,575/4,576 per tonne, down $14 on Wednesday's close. Volumes have been weak – just over 10,000 lots changed hands on Select by the kerb close.
According to today's warehouse data, stocks rose a net 75 tonnes to 209,950 tonnes and cancelled warrants fell 950 tonnes to 38,125 tonnes.
Aluminium ended $2 lower at $1,517; stocks fell 5,900 tonnes to 2,793,650 tonnes. Still, the backwardation in spreads flared higher today - the benchmark cash/threes increased to $10.25, with cash/March at $12.30.
Nickel fell $55 to $8,350 after stocks climbed 864 tonnes to 438,306 tonnes and cancelled warrants fell 2,208 tonnes to 158,514 tonnes.
Zinc climbed $52 at $1,697 - stocks fell 1,625 tonnes to 497,825 tonnes. Lead slipped $9 to $1,725 after stocks climbed 5,525 tonnes to 206,075 tonnes, a move was centred on Antwerp. There has been fresh warranting of 18,000 tonnes in Vlissingen on Wednesday.
Tin traded at $15,605, down $50. Stock movements were routine. The metal hit $15,800 on Wednesday on speculation "that one Indonesian tin producer had halted shipments; together with continuous stock drop that has lasted for over a month, it is no surprise that tin has outperformed other metals again heavily influenced by fundamental changes", Triland noted.
"Tin has seen been seeing some support lately - stocks keep falling and we have also seen quite a lot of CTA buying. But I don’t think there is any more upside there," the trader said.
Steel was indicated at $185/235, cobalt at $22,450/22,950 and molybdenum at $11,700/12,200.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)