LME CLOSE - Metals mostly lower, investors hold fire ahead of upcoming economic inputs

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

London 26/07/2016 - Base metals business was patchy and erratic on the LME on Tuesday, with prices mixed but mostly below previous closing levels amid a short-term ranging-mode, traders said.

"We are seeing another very quiet day in most markets. With the Fed decision out tomorrow, there is little inclination for funds to take an aggressive view one way or another," analyst Ed Meir at RDM INTL FCStone said in a report.

Consolidation and hesitation has set in, mirroring behaviour in wider financial markets and instruments. This is ahead of the outcome of the two-day US FOMC meeting that starts today, where rates are largely expected to stay unchanged; Friday's Bank of Japan outlook report and possible stimulus measures; and the US second-quarter GDP flash reading.

In other markets, the dollar was slightly higher against the euro around 1.0980 while oil prices fell to multi-month lows today - spot Brent crude hit a new two-and-half-month low of $44.11 per barrel at one point before rebounding to a steady $44.70.

Equities were mixed - the UK FTSE was some 0.1 percent higher while the US Dow Jones dropped 0.4 percent.

On the data side, ahead of those more-important monetary policy and economic growth releases to come this week, various US figures were mixed this afternoon.

The housing-related May S&P/CS HPI was slightly lower than expected at 5.2 percent while July's flash services PMI also undershot at 50.9. But there were better results from the July CB consumer confidence index, which was 97.3 against a forecast 95.6.

June's new home sales were an annualised 592,000 compared with a predicted 560,000, while the July Richmond manufacturing index was a robust 10 - it had been seen coming in at -4.

In the metals, copper was the exception to the overall lower trend, encountering sub-$4,900 support. After bouncing off a two-week low of $4,859, the market ended the day at $4,930 per tonne, up $30 from the Monday close. Earlier, warehouse stocks fell a net 7,625 tonnes to 213,725 tonnes.

Aluminium suffered a late lurch under $1,600 and closed at $1,592, down $13. Stocks continued to climb, up 4,975 tonnes to 2,324,125 tonnes, while cancelled warrants fell 9,025 tonnes to 925,500 tonnes.

Nickel continued to trade sideways in the mid-$10,000s, moving away from morning two-week lows to end at $10,350, a $125 loss. Inventories were a mere six tonnes higher at 373,614 tonnes.

Zinc touched one-week lows of $2,212 before concluding at $2,229, down $20. Stocks fell 200 tonnes to 436,600 tonnes. Lead also hit its lowest in one week today and ended indicated at $1,833/1,834, down $10, with stocks earlier falling 125 tonnes to 187,225 tonnes.

Tin finished the day at $17,675, down $100, although stocks fell 260 tonnes this morning to 5,710 tonnes.

Steel billet was neglected while cobalt was indicated at $25,400/25,900 and molybdenum at $14,250/14,750. Cobalt cancelled warrants increased 32 tonnes to 97 tonnes while molybdenum cancelled warrants were up 18 tonnes to 66 tonnes.


(Additional reporting by Ewa Manthey, editing by Mark Shaw)



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