LME base metals up slightly after strong Wednesday trading

All base metals prices on the London Metal Exchange saw slight increases for the second morning in a row during early trading on Thursday April 6.

Following strong trading on Wednesday, with prices closing up by an average of 1.5%, zinc broke back through the $2,800 mark today and the three-month copper price is sitting just below $5,900 per tonne.

The news that a new economic zone will be built in China, combined with the country’s markets returning to trading after a national bank holiday, had a positive effect on activity in the market.

“The Xiongan special economic zone [in the Chinese province of Hebei] is set to bolster investment in the construction sector with authorities looking to turn the region into a new growth centre,” ANZ Research said on Thursday.

“We have not seen a huge reaction to copper in Peru or the Chinese news yet and we expect that to come,” an analyst said. “Elsewhere, nickel is one to watch this quarter as it could be about to pick up if trade in the Philippines does.”

Copper edging closer to $6,000/t mark

  • Copper was one of the big movers yesterday, gaining $115.50 per tonne. It was last at $5,898.50 per tonne, up $3.50 on yesterday’s close.
  • The metal will be looking to move back up to the $5,900 mark after declining earlier in the week.
  • In warehouse stocks data, inventories declined a net 3,200 tonnes to 270,550 tonnes. Cancelled warrants fell 4,650 to 110,125 tonnes.
  • Potential disruptions continue to buoy copper prices as union members working at Southern Copper Corp’s Toquepala and Cuajone mines in Peru are planning a strike. The company said strikes could start as early as Friday.
  • Eyes will be on whether strikes in Peru spread or if there will be further repercussions, traders said.
  • Some of copper’s major participants are in Chile for Cesco Week.

Other metals remain strong

  • Nickel was the largest percentage gainer yesterday, up 3.5%, after breaking through the $10,000 mark. It was at $10,320 per tonne during this morning’s trading, up $25 on Wednesday’s close.
  • Nickel stocks fell 306 tonnes to 376,560.
  • Aluminium prices were up $3.50 during early morning trading to $1,964.50 per tonne. Stocks continued to decline, and fell 13,375 tonnes to 1,837,050 tonnes.
  • Zinc prices hit $2,800 per tonne this morning, up $22 on the previous close. Inventories were down 1075 tonnes to 368,450 tonnes.
  • The three-month lead price increased by just $1 from Wednesday’s close at $2,312 per tonne. Stocks fell 2900 tonnes to 175,800 tonnes.
  • The three-month tin prices started trading at $20,275 per tonne, up $170. Stocks were unchanged.

Currency moves and data releases 

  • The FTSE 100 was down 39.35 to 7,292.33.
  • The Brent crude oil spot price was up 0.83% to $54.42 per barrel.
  • The dollar index price rose 0.14%, staying well above the 100 mark at 100.67.
  • The minutes of the US Federal Reserve’s March meeting, which were released on Wednesday, indicated a gradual pace of rate increases remains likely.
  • Friday will see the release of blockbuster US non-farm payrolls and unemployment data, which will give further direction on the dollar, a Shenzhen-based analyst said.
  • Data out later includes the EU retail PMI, UK housing equity withdrawal, ECB monetary policy meeting accounts, US Challenger job cuts, initial jobless claims and natural gas storage.