London 11/05/2016 - Base metals ended Wednesday LME trading in positive territory, supported by a weaker dollar while the market awaits Chinese data releases tomorrow for fresh direction, traders said.
Glencore CEO Ivan Glasenberg tried to boost morale, telling a conference in Miami that structural deficits should emerge in metals such as copper and zinc in the next few years, with supply lagging behind demand.
"The primary reasons for this are apparently the quality of the resources and the tight supply brought about by low prices. We share this assessment and anticipate higher metal prices in the medium to long term," Commerzbank noted.
But sentiment remains cautious overall - slowing global growth and a quieter-than-expected second quarter are weighing on prices.
It was a slow day for data today; the market now awaits Chinese M2 money supply and new loans numbers of Thursday. In other markets, the rebound in the dollar index has paused today - it was last lower at 93.76.
In the metals, copper fluctuated around $4,700 before concluding at $4,708 per tonne, up $28 on Tuesday's close. Stocks were little changed, climbing a net 725 tonnes to 161,625 tonnes, while cancelled warrants fell 425 tonnes to 42,475 tonnes.
Still, nearby spreads have eased - the cash/May date was last at a contango of $2. A backwardation has re-emerged in June, however, at $11. There is potential for further tightness - LME warrant holding data showed there is one holder in all three reported positions in the 50-79 percent bracket.
Aluminium ended at $1,564, up $10. Stocks and cancelled warrants both fell 7,375 tonnes to 2,598,125 tonnes and 1,073,950 tonnes respectively.
Nickel at $8,885 was up $175 after inventories fell 690 tonnes to 414,024 tonnes and tin closed at $17,250, up $90. Stocks climbed 110 tonnes to 6,160 tonnes.
Lead ended $27 higher at $1,774 - stocks edged 50 tonnes lower to 175,300 tonnes - while zinc climbed above $1,900 in today's session for the first time since May 3. It closed at $1,903, up $55, continuing to gain support from expectations that the market will move to a deficit, traders noted.
Reports from the MB zinc conference in Madrid this week have been fairly bullish, with analysts forecasting a price rise in 2017 due to tight supply of raw materials.
Stocks and cancelled warrants were both 875 tonnes lower at 392,600 tonnes and 76,450 tonnes respectively.
Steel billet was last indicated at $65/115 and cobalt and molybdenum at $23,000/23,500 and $14,800/15,300 respectively.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)