This comes amid narrowing spreads for LME nickel, with the metal’s benchmark cash/three-month spread recently trading at $39.75 per tonne contango, with the spread softening from $45.50 per tonne contango on Wednesday.
While buying momentum across the complex continues to be supported by a volatile US dollar index, which remains below 93, US policymakers remain in a stalemate over a proposed coronavirus aide bill, dampening investor sentiment in commodity assets.
Both US Treasury Secretary Steve Mnuchin and Democratic House of Representatives Speaker Nancy Pelosi remain in discussions over the proposed bill, with both sides still undecided on the final amount, which is a figure said to be over $2.2 trillion.
Despite this, US multinational investment bank Goldman Sachs said on Thursday that commodities are set to be heading for a bull market in 2021, with rising inflation risks and continued global fiscal stimulus packages supporting demand.
Meanwhile, LME copper’s outright price spiked to its highest level in over two years on Wednesday, pushing above the $7,000-per-tonne threshold before closing just below the mark. The red metal’s underlying price was recently trading at $6,935 per tonne, down by 0.86% from an intra-morning high of $6,987 per tonne.
Turnover was moderately low for LME copper at just over 5,000 lots exchanged as at 10.45am London time.
LME copper’s benchmark cash/three-month spread was recently trading at $11.75 per tonne contango, while outflows this morning were minimal after just 1,050 tonnes were removed from LME-registered warehouses in New Orleans, Bilbao and Rotterdam.
Last month, more than 60,000 tonnes of copper cathode were delivered into warehouses in Rotterdam, with a backwardation in the metal’s forward curve prompting the deliveries.
The LME’s latest off-warrant stock data also showed more than 100,000 tonnes of stocks held outside the LME network over August in Rotterdam locations, indicating robust supply in Europe for copper. The bulk of demand for copper remains concentrated in Asia.
- In other commodities, Brent crude oil futures were higher over the morning, climbing by 0.17% and recently trading at $42.15 per barrel.
- The West Texas Intermediate (WTI) oil price was recently at $40.08 per barrel, climbing by 0.26%.
- Meanwhile, the US dollar index was recently trading 0.25% higher at 92.89.
- In US economic data due this afternoon, weekly unemployment claims are due, with the current forecast expecting some 860,000 people claiming unemployment.