London 05/10/2016 - Base metals other than aluminium ended LME trading on Wednesday, October 5 in negative territory due to risk-off, a stronger dollar and the absence of Chinese market participants.
Volumes were low - just 8,300 lots of copper had traded on Select by the kerb close, outpaced by aluminium's 11,600 lots.
"China plays so much part of trading now - when they are not here, you really feel it," an LME trader said. "You look at the volumes when China are gone and it is depressing. Everyone stands on the sidelines and speculators are looking everywhere but metals."
The dollar was gaining ground the US non-manufacturing PMI and factory orders both outperformed. The dollar index was recently around the day's high at 96.18 - it had notched up a two-month peak of 96.44 on Tuesday.
The ADP non-farm employment change at 154,000 missed the forecast of 166,000. This number is seen as a precursor to Friday's blockbuster non-farm payrolls data - this is expected at 171,000 against the previous 151,000.
In the metals, the sensitive 'Tom'/Next (tomorrow/next day) spreads have tightened in several - that of zinc was in a backwardation of $7.50 per tonne, lead at $5 and tin at $2.
For zinc and lead, large warrant holding positions increase the likelihood of further tightness. There is one holder at 50-79 percent for cash while lead has one in both the 'Tom' and next positions at 80-89 percent.
Three-month copper closed at $4,800 per tonne, a drop of $5 on Tuesday's close but off earlier one-week lows of $4,773.
Stocks fell a net 3,475 tonnes to 365,050 tonnes, a move centred on Busan. Cancelled warrants rose 6,200 tonnes, with almost 6,000 tonnes of fresh cancellations in Hull, 1,725 tonnes in Gwangyang and 1,350 tonnes in Singapore.
The three-month zinc price closed at $2,343 per tonne, down $37, after stocks jumped 5,325 tonnes to 452,875 tonnes, mostly into New Orleans. Cancelled warrants rose 2,025 tonnes to 34,300 tonnes.
As well as the tightness in 'Tom'/Next, there is also a backwardation in cash/Oct at $6. The most recent LME warrant data shows there is one holder in both the 'Tom' and cash positions at 30-39 percent.
Nickel was unchanged at $10,080 per tonne, basis three months, after it had earlier dropped to its cheapest since September 19 at $9,945, reflecting an easing in supply concerns - there is talk that the Philippines would give mines extra time to adhere to environmental rules and that Indonesia could restart nickel ore exports.
Stocks and cancelled warrants were both 906 tonnes lower at 360,558 tonnes and 110,718 tonnes respectively.
Three-month lead concluded at $2,045 per tonne, down $28; stocks fell 375 tonnes to 190,775 tonnes and cancelled warrants fell 125 tonnes to 46,025 tonnes. Yesterday, close to 20,000 tonnes were rewarranted, which pulled prices back from their highest since May 2015.
Aluminium for delivery in three months finished at $1,675 per tonne, up $6. Stocks and cancelled warrants both fell 6,400 tonnes to 2,141,875 tonnes and 858,625 tonnes respectively.
Three-month tin prices also fell to one-week lows below $20,000 - the contract ended at an unchanged $19,885 per tonne. Stock fell 95 tonnes to 3,475 tonnes, while in spreads the benchmark cash/threes was last at $78 back.
Steel was indicated at $300/325 per tonne, cobalt at $27,500/28,000 and molybdenum at $15,000/15,500. Cobalt stocks fell six tonnes to 619 tonnes.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)