LME base metals consolidating; copper dips but still well supported

Base metals prices on the London Metal Exchange were mostly consolidating during morning trading on Friday December 22, the last trading day before Christmas.

The three-month copper price dipped $28 per tonne this morning but remained well supported above $7,000 per tonne.

“The rallies in the base metals prices continue with underlying tails on candlesticks suggesting dip buying interest. It looks as though the rallies are being driven by fresh buying, which suggests that the underlying bullish fundamentals are re-exerting themselves,” Metal Bulletin senior analyst William Adams said.

“We remain quietly bullish and continue to expect range-trading in high ground; it looks as though the base metals could put in a strong finish to 2017,” he added.

The three-month nickel price dipped $20 per tonne while lead also dipped slightly – but both metals remained rangebound.

Aluminium and zinc prices were little changed this morning, supported by recent weakness to the dollar and end-of-year bullish sentiment.

“The continuous drop in the US dollar index has driven the investors to high-profit assets [and] bullish sentiment [has] strengthened,” Citic Futures Research said.

“With the looming holidays, major trading will be driven by Asia,” it added.

Copper prices well supported to push higher

  • The three-month copper price was down $28 to $7,058 per tonne.
  • Copper stocks dipped a net 50 tonnes to 201,600 tonnes, with 4,875 freshly canceled.
  • The price is still being supported by supply concerns – copper production in Peru is also likely to be subdued in the future due to a political crisis.
  • Peru has postponed the auction of the Michiquillay copper project until February 20 because the country’s political crisis is turning companies that are interested in developing the project cautious.
  • World mine production is estimated to have declined around 2.5% in the first nine months of the year, with concentrate production falling by 1.7% and that of solvent extraction-electrowinning product down by around 5%, the International Copper Study Group (ICSG) said on Wednesday December 20.
  • Chilean output experienced a 4% decline in mine production due to labor issues at Escondida at the beginning of the year and lower output from other Codelco mines. Overall production for the world’s largest copper producer fell to a six-year low, the Lisbon, Portugal-based group added.

Base metals prices

  • The three-month aluminium price was up $1 to $2,149 per tonne. Inventories declined 1,075 tonnes to 1,104,950 tonnes.
  • Nickel’s three-month price declined $20 to $12,010 per tonne. Stocks were 726 tonnes higher at 374,136 tonnes.
  • The three-month zinc price edged $2 higher at $3,244 per tonne. Inventories dipped 1,550 tonnes to 186,675 tonnes.
  • Lead’s three-month price dropped $9 to $2,495 per tonne. Stocks increased 75 tonnes to 141,950 tonnes.
  • The three-month tin price increased $75 to $19,425 per tonne. Inventories dipped 55 tonnes to 2,395 tonnes.

Currency moves and data releases

  • The dollar index was down 0.05% to 93.34.
  • In other commodities, the Brent crude oil spot price was up 0.17% to $64.73 per barrel.
  • The economic data calendar is still busy for the last working day prior to Christmas, with US personal income and spending, new home sales, durable goods orders, the Personal Consumption Expenditures (PCE) price index, as well as UK GDP growth numbers all due out later today.