Volume has been below average with 6,536 lots traded as of 06:25 BST, and for a change nickel volume has outpaced that of copper, aluminium and zinc.

Wednesday saw the LME base metals evenly split between gains in nickel (3%), aluminium (1.6%) and tin (0.7%) and losses in lead (-1.4%), zinc (-0.5%) and copper (-0.1%).

Precious metals prices are similarly split this morning with bullion prices lower, with gold at $1,289.02 per oz (-0.1%) and silver at $17.04 per oz (-0.2%), while the platinum group metals (PGMs) are higher by around 0.2% This follows a stronger day on Wednesday that saw the complex rise by an average of 0.5%.

On the Shanghai Futures Exchange (SHFE) this morning, lead prices are down 0.9%, while the rest are up between 0.2% for zinc and 2.4% for nickel, with aluminium up 1.6% and copper up 0.3% at 51,800 yuan ($7,773) per tonne. Spot copper prices in Changjiang are up 0.5% at 51,420-51,670 yuan per tonne and the LME/Shanghai copper arb ratio stands at 7.83 (down from 7.86 on Wednesday).

Steel rebar and iron ore prices in China have rebounded after Wednesday’s weakness; SHFE rebar prices are up 1.8% and iron ore prices on the Dalian Commodity Exchange are up 1.9% at 593 yuan per tonne on the January 2018 contract, while gold and silver prices on SHFE are little changed.

In international markets, spot Brent crude oil prices are up by 0.1% at $52.54 per barrel, the yield on US ten-year treasuries is weaker at 2.17% as is the German ten-year bund yield at 0.38%.

Equities in Asia are mixed this morning – gains are being seen on the Hang Seng Index (+0.5%), the Kospi (+0.4%) and the ASX 200 (+0.1%), while the Nikkei (-0.4%) and the CSI 300 (-0.3%) are weaker. In the USA, the Dow Jones closed down 0.4% at 21,812.09 and in Europe, the Euro Stoxx 50 closed down 0.5% at 3,438.63.

The dollar index is weaker again this morning at 93.25 – weighed by concerns over US president Donald Trump’s policies, or lack of them, and his threats to close down the government. Sterling at 1.2779 is heading lower, the euro at 1.1798 is consolidating, as is the Australian dollar at 0.7894, while the yen is firm at 109.11.

On the economic agenda there is a host of UK data including second estimate of GDP, business investment, index of services, mortgage approvals and CBI realised sales, while US data includes initial jobless claims, existing home sales, mortgage delinquencies and natural gas storage. In addition, the central bankers’ Jackson Hole Symposium gets underway, which is likely to keep the markets’ focus over the next few days.

The base metals are generally bullish, some more than others, with lead and tin the ones showing most volatility. The second quarter this year was if anything a period of price weakness as the markets had to absorb the extra metal that was enticed out of the woodwork by the run in price between November and February, but with that extra supply now absorbed, it does look as though supply tightness is in the driving seat. Overall, therefore, the trends continue to look bullish, but up at these higher price levels the metals are likely to have to absorb more selling/pricing, so choppy trading should be expected. On balance, we remain bullish for the base metals complex.

Precious metals prices are also consolidating, gold and silver prices are holding up well for now and given the geopolitical undercurrent that is not surprising, but the PGMs may be more vulnerable to price corrections, especially palladium.

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