London 25/08/2016 - Base metals were something of a mixed bag on Thursday - the weakness in copper extended to aluminium, nickel and tin but zinc, lead and tin edged higher.
With much of Europe closed for August holidays, prices have again been choppy in thin conditions but spreads and stock moves have provided interest. Copper and aluminium inventories have both risen sizeably in Asia this week.
"Prices are dead so people are looking elsewhere to make money. For copper we should have completed the increases now but [the sizeable volume of] metal that is now in warehouses... will weigh on prices,” a warrant trader said.
"For ali it's old stock that two years ago had a huge premium if you wanted to get your hands on it; now it's offered at virtually nothing. Keep an eye on the contango - if it widens, people will lock it away. The big boys get cheap rent so if it can hold a minimum of $20 contango we could see more," he added.
Elsewhere, data from the US has been mixed. Core durable goods were solid at 1.5 percent as were durable goods orders at 4.4 percent and unemployment claims at 261,000 was better than the expected 265,000. But the flash services PMI at 50.9 undershot the expected 51.9.
The Jackson Hole symposium of central bankers in Wyoming, which started today, will feature a speech by Federal Reserve chair Janet Yellen on Friday, which market participants will scrutinise for any indications about a near-term interest-rate rise.
Market participants see a roughly 20-percent chance of a rise in September and are looking at a 50-percent probability of a move in December.
In the metals, copper closed at $4,626 per tonne, down $6 and having earlier fallen to a low of $4,620 - still around its weakest since the end of June. Around 14,600 lots changed hands on Select by the kerb close.
The red metal has come under pressure from repeated stock increases in Asian LME-bonded warehouses. In today's warehouse data, inventories rose a net 9,175 tonnes to 263,875 tonnes, with the Gwangyang total up 8,000 tonnes while 3,400 tonnes went into warehouses in Hull, lifting UK copper to five percent of global LME stocks from zero at the start of the year.
Southeast Asian stocks now account for 74 percent of global stocks - they were about 25-26 percent at the start of the year.
Aluminium ended at $1,644, down $2. Stocks and cancelled warrants both fell 5,325 tonnes to 2,253,775 tonnes and 916,775 tonnes respectively.
Nickel at $9,845 was down $150. The metal fell below the psychologically important $10,000 level for the first time since mid-July during yesterday's kerb trading - support from the Philippines mining crackdown is waning.
"On the physical side, there are fears that the large deliveries of metal into warehouse in Asia may be replicated in nickel," Triland noted.
Nickel stocks dipped 792 tonnes to 372,414 tonnes and cancelled warrants fell 552 tonnes to 112,884 tonnes.
Zinc increased $18 to $2,298. Cash/threes was last at a backwardation of $5.75 while cash/Sept was backwardated at $9, cash/October at $6.65 and cash/November at $1.10.
Zinc stocks slipped 200 tonnes to 455,075 tonnes and cancelled warrants increased 2,350 tonnes to 26,150 tonnes. Still, traders said there could be stock increases if metal owners take advantage of the backwardation.
Lead concluded at $1,862, up $7, after stocks and cancelled warrants both fell 350 tonnes to 187,300 tonnes and 67,850 tonnes respectively while tin ended at $18,750, down $100, even after stocks fell 40 tonnes to 4,530 tonnes.
Steel billet was bid at $325 while cobalt was indicated at $25,750/26,250 and molybdenum at $16,000/16,500.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)