LME CLOSE - Metals mixed, struggle to consolidate after technical sell-off

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Martin Hayesmartin.hayes@fastmarkets.com+44 (0) 20 7337 2148

London 10/05/2016 - Base metals generally swung either side of Monday's closes during Tuesday LME trading, with prices largely consolidating and averting further downswings after the previous session's sell-off.

"It has been slow, with the markets just a bit rangy, as there is less selling pressure today," a trader said.

The lull the complex had settled into - tighter comfortable ranges - resulted in reduced business flows and volumes, with the day seeing little frontline economic data after this morning's better-than-expected Chinese CPI figures, traders said.

This afternoon, US March wholesale inventories rose 0.1 percent, slightly below the anticipated 0.2-percent increase. March JOLTS job openings were an annualised 5.76 million versus a forecast of 5.45 million. There was little impact on metals prices.

Earlier, the market received a slight boost after the Chinese CPI rose 2.3 percent year-on-year in April, in line with consensus and unchanged from last month, while its PPI fell by a less-than-expected 3.4-percent compared with -4.3 percent in March.

But this merely provided a modest backstop - China's soft import data over the weekend, which knocked many metals to four-week lows on Monday, indicates continued stuttering economic growth and confidence.

In the metals, copper fluctuated throughout the day around $4,700 before finally swinging lower to end at $4,685 per tonne, a mere $1 loss from Monday and holding above the early four-week low of $4,677.

This morning warehouse stocks rose a net 1,300 tonnes to 160,900 tonnes due to arrivals in Kaohsiung and Singapore. Cancelled warrants were also higher, rising 625 tonnes to 42,900 tonnes.

Aluminium crumbled to touch a four-week low of $1,551.50 before ending at $1,554, a $7 loss. Inventory data showed cancelled warrants increased 14,500 tonnes to 1,081,325 tonnes in a move centred on Vlissingen where 20,800 tonnes were freshly cancelled. Total stocks were down 7,125 tonnes to 2,605,500 tonnes.

Nickel's two-day technical sell-off abated - the stop-loss pressure seen below $9,000 dwindled. Last business at $8,700 was up $95. Today, stocks were 24 tonnes higher at 414,714 tonnes.

Lead gained $16.50 at $1,747 although stocks earlier rose 1,575 tonnes to 175,350 tonnes. A dominant holder in both the 50-79 percent and 30-39 percent brackets has kept spreads tight, while attracting metal on-warrant.

In others, zinc concluded at $1,848, up $13 - inventories were down 825 tonnes to 393,475 tonnes.

Tin hit a two-week low at $17,070 before closing at $17,160, still down $65, Stocks continued to grow, rising 175 tonnes to 6,050 tonnes due to arrivals in Singapore.

Steel was indicated at $65/115, molybdenum at $15,000/15,300 and cobalt at $23,000/23,500.

(Additional reporting by Kathleen Retourne, editing by Mark Shaw)

 



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