Market and product

Base metals other than tin returned to positive territory in comparatively quieter LME trading.

Although a sizeable 12,000 lots of copper have changed hands on Select so far today, for example, this is below last week’s record-breaking volumes – on Friday, more than 72,000 lots of the metal traded on the electronic platform.

All the metals hit fresh 2016 highs last week in explosive price moves across the complex, particularly for copper.

This morning, the three-month LME copper price at $5,664 per tonne was up $115 on Friday’s close. CTA, Chinese fund and algorithmic buying coupled with producer hedging to propel the metal on Friday to $6,025 per tonne – its highest since June 2015 – before it crashed to end at $5,549 per tonne.

In today’s inventory moves, stocks fell a net 4,700 tonnes to 266,150 tonnes but 7,550 tonnes were put back on warrant, a move centred on Asia.

In Chinese data, industrial production rose 6.1% year-on-year in October, close to the expected 6.2%, and fixed asset investment increased 8.3% year-on-year in January-October, also close to the forecast of 8.2%. Retail sales, however, grew 10.0% year-on-year in October, below consensus of 10.7%.

In currencies, the dollar index was up 0.5% at 99.97, having earlier got above 100 for the first time since December 2015. The currency was buoyed by expectations of larger fiscal spending and higher inflation when president-elect Donald Trump takes office next year.

The three-month aluminium price at $1,748 per tonne was up $3. In spreads, the sensitive ‘Tom’/Next recently traded at a small backwardation of $0.75 while cash/Dec was at $4 back – this week marks ‘Third Wednesday’ when the November date becomes prompt.

Stocks fell 6,400 tonnes to 2,098,950 tonnes and cancelled warrants rose 8,350 tonnes to 753,725 tonnes.

The three-month nickel price rose $35 to $11,245 per tonne. It had pushed above $12,000 per tonne on Friday for the first time since July 2015. Stocks at 365,505 tonnes were 1,092 tonnes higher due to arrivals in Johor.

The three-month zinc price at $2,544 per tonne was $72 or 2.9% higher and back around five-year highs. Stocks fell 300 tonnes to 446,350 tonnes and cancelled warrants increased 2,350 tonnes to 75,875 tonnes, with 2,000 tonnes freshly rewarranted in New Orleans.

The three-month lead price recently traded at $2,160 per tonne, up $50 or 2.4%. Stocks were unchanged at 187,500 tonnes.

Bucking the upward trend was three-month tin – the price was recently at $21,265 per tonne, down $135. LME stocks have started to creep higher – they rose another 40 tonnes to 3,140 tonnes.

Steel, cobalt and molybdenum were neglected. - fastmarkets.com