Base metals mixed, nickel price around two-wk highs

Base metals were once again mixed on Tuesday morning on the LME – nickel is the best performer, climbing to its strongest in around two weeks.

A weaker dollar is providing support to the complex. The dollar index was weaker at 95.62 on reduced expectations of a September rate rise in the US following the weaker-than-expected jobs report last week, a trader noted.

Only 151,000 Americans joined the labour market, missing expectations of an 186,000 increase. The next FOMC meeting is scheduled for September 20-21.

Investors are now awaiting data from China for more direction – trade data is due on Thursday ahead of CPI and PPI inflation readings on Friday while industrial production, retail sales and fixed asset investment readings are scheduled at the start of next week.

The USM non-manufacturing PMI, IBD/TIPP economic optimism and labour market conditions index from the US are due later today. US markets will reopen today following the Labor Day holiday weekend.

In the metals, copper recently traded at $4,641 per tonne, up $15 on Monday’s close. The metal is finding support from the strike at Codelco’s Salvador mine in Chile. Business has been fairly quiet, though, with only around 4,000 lots having changed hands so far.

“The $4,600 support is still holding well with nothing close to a test,” broker Triland noted. “However going forward the market ability to move away from the level will be key, otherwise renewed downside risk could hurt the complex, beyond copper.”

Stocks increased a net 6,450 tonnes to 334,975 tonnes – the increase was again centred on Asia. Inventories are now at their highest since September 2015. Cancelled warrants slipped 800 tonnes to 44,375 tonnes.

Aluminium, which yesterday fell to its lowest in around three months, was last just $2 higher at $1,582. It remains under CTA selling pressure, a trader said, with its widening spreads suggesting scale-down forward buying.

Stocks and cancelled warrants both fell 3,900 tonnes to 2,212,275 tonnes and 918,125 tonnes respectively. Aluminium stocks are now at their lowest since December 2008.

Nickel was last at $10,115, up $45 and around a two-week high – news that the Philippines authorities are reviewing export activity and growing reductions of nickel ore exports have been supportive for the metal, Sucden noted.

Stocks climbed 138 tonnes to 367,896 tonnes while cancelled warrants fell 1,206 tonnes to 111,228 tonnes.

Zinc at $2,336 was $5 higher. The backwardation in the benchmark cash/threes spread has now disappeared – it was last in a contango of $1.50. Cash/September and cash/October are backwardated at $3 and $4.22 respectively.

Stocks fell 575 tonnes to 449,925 tonnes and cancelled warrants climbed 775 tonnes to 22,600 tonnes.

Lead slipped $11 to $1,958.50, with stocks and cancelled warrants both 225 tonnes lower at 187,000 tonnes and 67,075 tonnes respectively.

Tin recently traded at $19,370, down $25. Stocks edged down 50 tonnes to 4,410 tonnes, the lowest since March this year. Steel, billet, cobalt and molybdenum were neglected.

(Editing by Mark Shaw)