Forward buying in the galvanizing metal was supported by wide spreads over the morning, with LME zinc's benchmark cash/three-month spread recently trading at $16.50 per tonne contango.
Meanwhile, with the London Metal Exchange’s virtual LME Week kicking off this week, rising queues at Port Klang warehouses, growing off-warrant inventories, pre-trade transparency and the LME’s move to an electronic warranting process are likely to be key discussion points.
Despite steady buying across the complex over the morning, the three-month aluminium price was subdued over the morning, falling by 0.3% and recently trading at $1,860 per tonne. Turnover was moderate at some 3,100 lots exchanged as at 9.30am London time.
LME aluminium’s forward curve was little changed this morning compared with last week, with its benchmark cash/three-month spread recently trading at $12.10 per tonne contango.
This comes after a fresh re-warranting of some 38,000 tonnes in Port Klang this morning, taking on-warrant stocks in the region to 647,350 tonnes, and total LME on-warrant aluminium stocks to a total of 1,174,175 tonnes.
“The data out of China this morning showed the [gross domestic product] growth rising at 4.9% year on year, and below the forecast of 5.2%, however it is the other numbers that show how China is bouncing back from the effects of Covid,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.
“The key for metals industrial production rose 6.9% against a previous of 5.6%, and retail sales grew by 3.3% in September all of which is a nice background for the upcoming congress. The metals have all moved slightly higher this morning reflecting this data and eying all the Asian equities that have moved to the upside,” he added.
Additionally, the Chinese unemployment rate in September was also better than expected, coming in at 5.4% from an expected level of 5.5%.
- In other commodities, Brent crude oil futures fell over the morning, declining by 0.03% and recently trading at $43.10 per barrel.
- The West Texas Intermediate (WTI) oil price was recently at $41.02 per barrel, climbing by 0.32%.
- Meanwhile, the US dollar index was recently trading 0.21% lower at 93.53.