London 17/08/2016 - Base metals ended Wednesday LME trading little changed from their previous closing levels with investors on the sidelines ahead of the release of the July US Federal Open Market Committee's (FOMC) minutes.
The US dollar index was steady at 94.91 having fallen yesterday to a June 24 low of $94.43 following New York Fed president William Dudley's comments on Tuesday that a September rate hike is possible.
"That will intensify the focus on the July FOMC minutes…where the statement [in July then] saw the Fed upgrade its assessment of the economy," ANZ said.
Atlanta Fed president Dennis Lockhart also said that he supported at least one interest rate increase before the year concludes, citing investment trends and optimism over third quarter GDP.
CME FedWatch lifted the odds of a September move to a still modest 24 percent after the two Fed speakers warned that a September rate hike is not off the radar, National Australia Bank (NAB) said. The probability of a hike taking place in December was lifted to over 50 percent chance- NAB’s forecast is that data will justify a hike by the December 15 meeting, the bank noted.
"The markets are moving on headlines and dollar changes but actually not doing very much at all and it’s one step-up and one step back. You could build a case for buy or sell - and so no one really knows what to do," an LME trader said.
In the metals, copper at $4,774 per tonne was down $37 on Tuesday's close as the red metal came under pressure from arrivals into Asian sheds. Total stocks were up close to 8,000 tonnes with the bulk of metal – 4,675 tonnes - arriving into Busan. Bilbao and Kaohsiung also noted increases up 2,250 tonnes and 1,000 tonnes respectively. Cancelled warrants were up 2,425 tonnes – also centred in Busan.
At least 30,000-40,000 tonnes of copper cathodes could flow into locations such as South Korea, Singapore, Malaysia and Taiwan, according to FastMarkets’ estimates.
Business was slow today and only around 9,000 lots changed hands on Select by the kerb close.
Aluminium at $1,694 edged $1 higher; it too noted increases in stocks. Total inventories were 24,500 tonnes higher at 2,240,600 tonnes due to arrivals into Detroit. Cancelled warrants were 3,000 tonnes lower at 942,650 tonnes. More than 15,000 lots changed hands - the most in the complex today.
Nickel at $10,220 was $35 lower while stocks fell 414 tonnes to 373,578 tonnes and cancelled warrants slipped 270 tonnes to 109,302 tonnes.
"News that the Philippines was nearing the end of its mining review raised the prospect of recently closed nickel mines being reopened," ANZ Research noted.
Zinc at $2,273 was up $16 and stocks dropped 375 tonnes to 457,525 tonnes while cancelled warrants were 175 tonnes lower at 25,900 tonnes.
Sister metal lead at $1,878 edged $3 higher and stocks and cancelled warrants fell 175 tonnes to 187,150 tonnes and 68,650 tonnes respectively.
Tin at $18,350 was down $50 and stocks fell 25 tonnes to 4,920 tonnes.
Steel billet was last indicated at $300/325 and cobalt and molybdenum at $26,250/26,750 and $15,500/16,000 respectively.
(Additional reporting by Kathleen Retourne, editing by Tom Jennemann)