LME CLOSE - Base metals end mostly higher, await more Chinese data for direction

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

London 08/09/2016 - Base metals apart from aluminium and zinc ended Thursday LME trading in positive territory - market participants are now awaiting a fresh bout of Chinese data tomorrow for more direction.

In today's data, Chinese overall exports fell 2.8 percent and imports rose 1.5 percent in August year-on-year in dollar-denominated terms, an improvement on falls of 4.4 percent and 12.5 percent respectively in July. Still, exports were down for a fifth consecutive month, signalling sluggish global demand, analysts said.

Preliminary copper imports continued to contract in August but at a slower rate - imports of unwrought copper and copper products fell 2.8 percent month-on-month to 350,000 tonnes. August was the fifth consecutive month of month-on-month declines but the drop last month was smaller than July's month-on-month decline of 14.3 percent.

China's dollar-denominated trade balance at $52.1 billion was below the expected $57.9 billion as was its yuan-denominated trade balance at 346 billion yuan, which missed the predicted 372 billion yuan.

The Chinese CPI and PPI inflation readings will be released on Friday and industrial production, retail sales and fixed asset investment numbers are scheduled for next week.

Elsewhere, Japan's final GDP rose 0.2 percent quarter–on-quarter and its economic watchers sentiment index climbed to 45.6 from 45.1

From the US, unemployment claims were a better-than-expected 259,000.

Earlier this afternoon, the European Central Bank kept interest rates unchanged. President Mario Draghi said he sees rates at present levels or lower for a sustained period but expects real GDP to grow at a moderate but steady pace.

In the metals, copper concluded at $4,664 per tonne, up $14 on Wednesday's close. More than 10,000 lots changed hands on Select by the kerb close.

Stocks fell a net 1,375 tonnes to 338,225 tonnes - the first drop after 12 consecutive days of increases mostly into Asian LME-bonded warehouses. Cancelled warrants rose 3,425 tonnes to 47,200 tonnes.

A strike at Codelco's Salvador copper mine has entered its third day, with the state-owned miner suspending about 40 contractors to prevent them from injuries, it said. Salvador is one of Codelco's smaller mining projects - it produced 49,000 tonnes of copper in 2015, down from 54,000 tonnes in 2014.

Aluminium closed at $1,590, a drop of $3. Stocks and cancelled warrants both fell 6,700 tonnes to 2,203,400 tonnes and 906,600 tonnes respectively.

Nickel was the best performer today. It concluded at $10,340, up $130 - prices remain supported by the Philippines mining audit, with further suspensions anticipated. Stocks climbed 102 tonnes to 367,854 tonnes.

Zinc at $2,315 was down $8; stocks slipped 175 tonnes to 449,750 tonnes. Lead ended $6 higher at $1,925; stocks increased 200 tonnes to 186,700 tonnes.

Tin at $19,575 was up $25, with stocks unchanged at 4,390 tonnes although availability is at its lowest since June 2004. The backwardation in the spreads has eased - the benchmark cash/threes was last at $65, having flared out to $250 on Tuesday - its widest since September 2015. Meanwhile, the warrant holder at 90-100 percent disappeared, according to today's LME data.

Steel billet was last indicated at $300/325 and cobalt and molybdenum at $26,000/26,500 and $15,750/16,250 respectively.

(Editing by Mark Shaw)



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