LME CLOSE - Base metals end mostly higher, investors remain on the sidelines

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Ewa Mantheyewa.manthey@fastmarkets.comCorrespondent+44 (0) 20 7337 2146

London 21/06/2016 - Base metals apart from nickel concluded Tuesday LME trading in positive territory but the mood remains uncertain, with investors sticking to the sidelines ahead of this week's UK referendum on EU membership, traders said.

Industrial metals came under pressure last week when polls about the UK's EU referendum indicated that the 'Leave' campaign had secured a lead of as much as 10 percent but the 'Remain' camp has since recovered some lost ground.

"Talking to money managers, they felt that yesterday the mood was for a 'Remain' vote. Now, they are not so sure so the metals are less of a 'buy' [and] more of a 'hold' today," a trader said.

"It has been more hesitant today and that's what you see in prices," another trader added.

US Federal Reserve chair Janet Yellen said a UK vote to exit the EU could have significant economic repercussions. She also noted that global risks and a US hiring slowdown warrant a cautious approach to raising interest rates - the Fed kept interest rates unchanged at its most recent meeting.

In the metals, copper concluded at $4,670 per tonne, up $26 on Monday's close. More than 18,000 lots changed hands on Select by the kerb close.

Stocks continued to slide, dropping 1,850 tonnes to 192,175 tonnes, although market participants generally expect more material to arrive into LME-listed warehouses due to favourable warehouse incentives.

Aluminium at $1,635.50 was up $2.50 after inventories fell 6,625 tonnes to 2,434,550 tonnes and cancelled warrants climbed 275 tonnes to 1,056,325 tonnes.

Nickel earlier peaked at a fresh six-week high of $9,315. It concluded at $9,190, down $95. The metal found support from concerns that miners in the Philippines could have their licences revoked if they fail to comply with environmental measures.

"This would tighten further a market already impacted for several years by the Indonesian ban on exports of unprocessed ore," Triland noted.

Still, Citi's David Wilson does not expect the price support since the start of June to be maintained, targeting a return to $8,500 per tonne levels in the third quarter of this year.

Stocks were 156 tonnes higher at 386,064 tonnes and cancelled warrants fell 846 tonnes to 124,326 tonnes.

Zinc at $2,026 was up $16; stocks and cancelled warrants both fell 1,175 tonnes to 396,100 tonnes and 26,625 tonnes respectively.

Lead at $1,709 was up $13; stocks fell 50 tonnes to 185,500 tonnes. Tin at $17,150 was $175 higher; stocks were unchanged.

Steel billet was last indicated at $300/325 and cobalt and molybdenum at $23,500/24,000 and $16,500/17,000 respectively. Cobalt stocks rose six tonnes to 645 tonnes.

(Additional reporting by Kathleen Retourne and Martin Hayes, editing by Mark Shaw)



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