Winter Park, Florida 09/09/2016 - London Metal Exchange (LME) base metals bar nickel moved lower on Friday as thin volumes indicate that the market hasn't been quite able to shake off the summer malaise.
In today’s data, China's August CPI came in at 1.3 percent, according to the National Bureau of Statistics, below July's reading of 1.8 percent and market forecast of 1.7 percent. It also fell short of the government’s three percent target.
China’s PPI, meanwhile, improved for the eighth straight month, falling just 0.8 percent in August from a year earlier and less than the 0.9 percent drop expected.
"The overall picture for China is still quite positive," Hao Zhu, Commerzbank economist, said on CNBC. “Narrowing producer price deflation suggests corporate earnings will be improving in the coming months. While CPI is still soft, it at least gives the government and the central bank more room to ease."
More Chinese data is due for release next week, including foreign direct investment, industrial production, fixed asset investment, retail sales, new loans and M2 money supply.
In the wider-markets, the Dow Jones industrial average and S&P were down 1.8 percent and 2 percent respectively, while the dollar strengthened 0.5 percent to $1.1212 against the euro.
In other commodities, light sweet crude (WTI) oil futures on the Nymex declined $1.68 or 3.5 percent to $45.94 per barrel. The most-active Comex gold contract was last trading at $1,333.10 per ounce, down $8.50.
In the metals, three-month LME copper concluded at $4,633 per tonne, down $31 on Thursday’s close. A modest 12,000 lots changed hands on Select by the kerb close, while inventories increased a net 13,375 tonnes to 350,600 tonnes.
“Copper has been one of the weaker base metals and sentiment seems far from bullish so we would not expect too much on the upside but we are not bearish,” FastMarkets head of research William Adams said.
“With the LME/Shanghai copper arbitrage window reopening, albeit only slightly, the increase in stocks may slow and there may be some buying of LME material to export to China. This is something to watch out for in the weeks ahead,” Adams said.
Aluminium closed down $11.50 at $1,578.50 per tonne. Stocks and cancelled warrants both dropped 7,050 tonnes to 2,196,350 tonnes and 899,550 tonnes respectively.
“We still see limited downside potential in aluminium,” FastMarkets analyst Boris Mikanikrezai said. “From a fundamental perspective, although the physical market continues to show signs of weakness, we think an adjustment on the supply side from China will be enough to underpin the current uptrend.”
The best performer was nickel, which ended up $25 at $10,370 per tonne. Stocks rose 78 tonnes to 367,932 tonnes but cancelled warrants increased 6,618 tonnes to 122,748 tonnes.
In nickel news, Indonesian state-owned miner PT Aneka Tambang (Antam) is eyeing the resumption of nickel ore exports on fresh talk that Indonesia might ease its ban on unprocessed ore exports.
Elsewhere, the Philippines may suspend or shut more mines next week following audits by the country's Department of Environment and Natural Resources. Eight nickel mines have been closed since the audits began.
Zinc at $2,291.50 was $22.50 lower, with stocks and cancelled warrants both falling 1,000 tonnes to 448,750 tonnes and 21,975 tonnes respectively. Lead ended at $1,902, a drop of $23, after stocks increased 1,150 tonnes to 187,850 tonnes.
Tin recently traded at $19,300, down $275. Stocks fell 100 tonnes to 4,290 tonnes. There was no activity in steel billet, cobalt and molybdenum.
(Additional reporting by Vivian Teo, Dalton Barker and Ewa Manthey)