Base metals quiet, copper stocks fall

Base metals were mixed again on Thursday morning on the LME in a quiet trading session – nickel is the best performer so far, rising about 1.1 percent.

The market is digesting a host of Chinese data. Overall exports fell 2.8 percent and imports rose 1.5 percent in August year-on-year in dollar-denominated terms, an improvement on falls of 4.4 percent and 12.5 percent respectively in July. Despite the improvements, exports fell for a fifth consecutive month, signalling sluggish global demand, analysts said.

Preliminary copper imports continued to contract in August but at a slower rate – imports of unwrought copper and copper products fell 2.8 percent month-on-month to 350,000 tonnes. August was the fifth consecutive month of month-on-month declines but the drop last month is smaller than July’s month-on-month decline of 14.3 percent.

China’s dollar-denominated trade balance at $52.1 billion was below the expected $57.9 billion as was its yuan-denominated trade balance at 346 billion yuan, which missed the predicted 372 billion yuan.

The Chinese CPI and PPI inflation readings will be released on Friday and industrial production, retail sales and fixed asset investment numbers are scheduled for next week.

Elsewhere, Japan’s final GDP rose 0.2 percent quarter–on-quarter and its economic watchers sentiment index climbed to 45.6 from 45.1

Data due later today includes US unemployment claims and crude oil inventories. A European Central Bank (ECB) meeting will take place later as well; key interest rates are expected to remain steady.

In the metals, copper was last at $4,649 per tonne, up just $1. Business has been fairly quiet – only around 3,000 lots have changed hands on Select so far.

Stocks fell a net 1,375 tonnes to 338,225 tonnes – the first drop after 12 consecutive days of increases mostly in Asia. Cancelled warrants rose 3,425 tonnes to 47,200 tonnes.

A strike at Codelco’s Salvador copper mine has entered its third day, with the state-owned miner suspending about 40 contractors to prevent them from injuries, it said. Salvador is one of Codelco’s smaller mining projects – it produced 49,000 tonnes of copper in 2015, down from 54,000 tonnes in 2014

Aluminium edged down $4 to at $1,589. Stocks and cancelled warrants both fell 6,700 tonnes to 2,203,400 tonnes and 906,600 tonnes respectively.

Nickel is the best performer today so far. It recently traded at $10,325, up $115 – prices remain supported by the Philippines mining audit, with further suspensions anticipated. Stocks climbed 102 tonnes to 367,854 tonnes.

Zinc at $2,302 was down $21 even after stocks slipped 175 tonnes to 449,750 tonnes. Lead was last $15 lower at $1,904; stocks increased 200 tonnes to 186,700 tonnes.

Tin recently traded at $19,595, up $45, with stocks were unchanged at 4,390 tonnes although availability is at its lowest since June 2004. The backwardation in the spreads has eased – the benchmark cash/threes was last at $81.75 having flared out to $250 on Tuesday – the widest mark since September 2015.

Steel billet, cobalt and molybdenum were neglected.

(Additional reporting by Vivian Teo, editing by Mark Shaw)