Market and product

Base metals were mixed on Thursday morning on the LME, taking heart from rebounds in equities and oil prices but capped by continued concerns over global growth.

In today’s data, China’s January CPI at 1.6 percent was close to the forecast of 1.7 percent and higher than December’s 1.5 percent, “which gives the government and central bank further scope for fiscal and monetary policy easing measures aimed at shoring up the economy”, Commerzbank noted.

China’s January PPI was -5.3 percent, a gentler decline than the forecast -5.5 percent and December’s -5.9 percent. January was the 47th straight month of decline, however.

Crude oil prices gained on news that Iran’s oil minister welcomed the prospect of cooperation between oil-producing countries although he did not say whether Iran would join in a proposed production freeze.

Russia, Saudi Arabia, Venezuela and Qatar had said earlier this week that they would freeze oil output at January levels as long as other producers also participate.

The Brent crude spot price has traded above $34 so far on Thursday – it was last at $34.94 per barrel – compared with a low of $31.79 on Wednesday.

Market reactions to the Federal Reserve minutes from its January meeting released last night were muted given that the tone was similar to its statement in January and that it comes after two recent speeches by Fed chair Janet Yellen.

“Participants judged that the overall implications of these developments for the outlook for domestic economic activity was unclear but they agreed that uncertainty had increased,” the minutes from the January 26-27 Federal Reserve meeting said. “Many saw these developments as increasing the downside risks to the outlook.”

Today’s US data includes the Philly Fed manufacturing index, unemployment claims and the CB leading index.

In the metals, copper recently traded at $4,555 per tonne, down $34 on Wednesday’s close. Volumes have been weak – fewer than 4,000 lots have changed hands on Select.

“It rather looks given the current volumes that it could be a quiet day on the markets and prices will simply drift as traders as yet cannot see a trend developing,” Kingdom Futures’ Malcolm Freeman said.

According to today’s warehouse data, stocks rose a net 75 tonnes to 209,950 tonnes and cancelled warrants fell 950 tonnes to 38,125 tonnes.

Aluminium edged $4 lower to $1,515. Stocks fell 5,900 tonnes to 2,793,650 tonnes.

Nickel fell $75 to $8,330 after stocks climbed 864 tonnes to 438,306 tonnes and cancelled warrants fell 2,208 tonnes to 158,514 tonnes.

Zinc climbed $15 at $1,660 – stocks fell 1,625 tonnes to 497,825 tonnes – but lead slipped $16.50 to $1,718 after stocks climbed 5,525 tonnes to 206,075 tonnes.

Tin recently traded at $15,725, up $70. Stock movements were routine.

The metal hit $15,800 on Wednesday on speculation “that one Indonesian tin producer had halted shipments; together with continuous stock drop that has lasted for over a month, it is no surprise that tin has outperformed other metals again heavily influenced by fundamental changes”, Triland noted.

Steel, cobalt and molybdenum were neglected.