Base metals mixed in quiet session, Asia copper stocks continue climb

Base metals were mixed on Monday morning on the LME in thin trading conditions while US markets are closed for the Labor Day holiday.

“But the holiday traditionally marks the end of the summer holiday period and should be followed by a gradual increase in volumes and potentially volatility while players position themselves for the final quarter of the year,” James Moore, FastMarkets analyst, noted.

Still, it is a busy day for data today. The Chinese Caixin services PMI for August was a better-than-expected 52.1 and up from 51.7 in July but below June’s reading of 52.7.

The EU final services PMI undershot at 52.8 but Sentix investor confidence at 5.6 was better than predicted.

In currencies, the dollar was a little weaker today – the dollar index was last at around 95.66 – after forecast-missing US jobs data trimmed expectations of a Federal Reserve rate increase in September. The US economy added 151,000 jobs in August, missing the expected 186,000.

The next FOMC meeting is scheduled for September 20-21.

“[And] with LME option declarations due this Wednesday, most people will be looking for the prices to hold current levels and the order book to LME Select looks fairly balanced so if true to recent action prices will tend to fall post declaration,” Malcolm Freeman of Kingdom Futures noted.

For the rest of the week, investors will be looking to data from China – 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.

In other commodities, oil prices are up this morning – Saudi Arabia and Russia are set to make a joint statement at the G20 meeting to support the oil market. Spot Brent crude was last up four percent at $48.44 per barrel.

In the metals, copper recently traded at $4,619 per tonne, down $8 on Friday’s close. Business has been slow, with only around 4,000 lots having changed hands on Select so far.

“Although the key $4,600 support was successfully tested copper is not safe from another challenge in the coming sessions and we know what kind of implications this could have if the level ends up broken,” broker Triland said.

In today’s warehouse data, copper stocks increased for the tenth consecutive day, rising a net 10,025 tonnes to 328,525 tonnes. Again, the move was centred on Asia – Busan inventories rose 8,750 tonnes to 84,175 tonnes, Singapore 1,425 tonnes to 71,075 tonnes and Gwangyang 1,000 tonnes to 47,700 tonnes. Cancelled warrants climbed 5,025 tonnes to 45,175 tonnes.

Aluminium at $1,590 was down $4. Stocks fell 4,250 tonnes to 2,216,175 tonnes and cancelled warrants increased 6,500 tonnes to 922,025 tonnes.

Nickel at $10,025 was $35 lower; stocks were down 672 tonnes to 367,758 tonnes. The Philippine government is close to finalising a seven-week environmental review of its mining industry, SP Angel noted.

Zinc recently traded at $2,368, up $4 – stocks edged 25 tonnes lower to 450,500 tonnes – and lead climbed $24 to $1,967 after stocks fell 50 tonnes to 187,225 tonnes.

Tin recently traded at $19,300, down $25, with stocks unchanged at 4,460 tonnes. Steel billet, cobalt and molybdenum were neglected.

(Editing by Mark Shaw)