LME CLOSE - Copper falls to six-week low, tin outperforms

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

London 23/08/2016 - Base metals ended Tuesday LME trading mixed - copper fell to a six-week low after more metal arrived in LME-listed warehouses while tin climbed to its highest since February last year amid tightening supply.

Copper concluded at $4,710 per tonne, down $38.50 on Monday's close - a six-week low. Fewer than 20,000 lots changed hands on Select by the kerb close.

Soft premiums in China continued to push material to LME Asian sheds. Copper stored in listed LME sheds in Busan jumped to its highest since January 2013, data showed on Tuesday.

Stocks in the South Korean city rose a net 11,775 tonnes to 59,100 tonnes, adding to the 10,175 tonnes that were delivered yesterday.

Total global stocks at 240,075 tonnes are the highest since January. Cancelled warrants fell 3,600 tonnes to 53,725 tonnes.

But tin was the outperformer today. The metal ended at its highest since February 2015 at $18,700, up $160. But volumes were thin - only around 300 lots changed hands.

Meanwhile, available tin stocks on the LME are the lowest since 2008 - today they were unchanged at 4,630 tonnes but are down from 6,050 tonnes at the start of July. The low this year was 3,655 tonnes before Indonesia's RBT started to liquidate its stocks, much of which is thought to have gone into LME-registered warehouses.

With stocks low, tins spreads are in backwardation - its cash/threes was last at $28.

"China is the potential swing producer due to its imported ore and concentrates from Myanmar but does not seem to be raising output especially now with environmental checks in place," FastMarkets' William Adams said. "Key will be whether Indonesia manages to continue to keep production in check."

In data today, the EU flash manufacturing PMI and services PMI were as expected at 51.8 and 53.1 respectively while its consumer confidence disappointed at -9. China's CB leading index at 0.7 percent was better than the previous 0.5 percent.

From the US, the flash manufacturing PMI undershot at 52.1 as did the Richmond manufacturing index at -11. But new home sales were a better-than-expected 654,000.

Investors are now awaiting Federal Reserve chair Janet Yellen's speech at the Jackson Hole symposium on Friday, which could provide insight into when the Fed might raise rates following recent hawkish comments from other US central bankers.

In the other metals, aluminium ended $2 lower at $1,669; stocks and cancelled warrants both fell 7,025 tonnes to 2,234,525 tonnes and 928,000 tonnes respectively.

According to data from the International Aluminium Institute (IAI), global aluminium production in July declined marginally year-on-year to 4.9 million tonnes. A 2.4-percent-fall in production in China was almost completely offset by production increases elsewhere.

"This trend has already been observed for some time. While Chinese aluminium production has decreased year-on-year in almost every month so far this year, it has been continually expanded outside China," Commerzbank noted, adding that it expects an amply supplied market.

Zinc ended at $2,302, $22 higher. A backwardation is evident in spreads, with the benchmark cash/threes last at $4.25 while cash/Sept was at $6.

Nickel closed at an unchanged $10,260/10,265 following a volatile month's trading. In the first half of August, the metal soared above $11,000 to fresh 2016 highs on supply concerns but sentiment has since soured - yesterday it crashed to the lowest since July 12. Stocks dipped by 144 tonnes.

Lead closed up $7 at $1,861; stocks and cancelled warrants were both 250 tonnes lower at 187,650 tonnes and 68,200 tonnes respectively.

Steel billet was last indicated at $300/325 and cobalt and molybdenum at $25,750/26,250 and $15,500/16,000 respectively. Cobalt cancelled warrants rose 10 tonnes to 99 tonnes.


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



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