Base metals stuck at recent lows, Chinese data undershoots

271.06Base metals were mixed in Friday’s LME pre-market trading but most are consolidating at lower levels while a bearish theme asserts itself.

Poor Chinese data has done little to improve sentiment. The country’s M2 money supply at 556 billion yuan undershot the expected 820 billion yuan while new loans at -3.6 percent missed the projected -2.8 percent. The European flash GDP reading at 0.5 percent also missed the forecast 0.6 percent.

“There are fears as to macro growth and the remaining firepower of central bankers to stimulate the economy,” a trader said, adding that there has been little of late to inspire confidence.

Sentiment has soured while oil prices have tracked lower – both Brent crude and WTI are around 0.3 percent lower at $47.76 and $46.20 per barrel respectively.

As well, a stronger dollar index – up 0.16 percent at 94.28 – is putting pressure on commodity prices denominated in the greenback.

In other data, the US has core retail sales, retail sales, its PPI and its core PPI scheduled. Attention will then turn to further data from China – industrial production, fixed asset investment and retail sales are all scheduled for release over the weekend.

In the metals, copper at $4,626 per tonne was $13 higher that Thursday’s close. The metal fell to a two-and-a-half-month low of $4,600 in yesterday’s session after the release of weaker-than-expected US economic data, a steady dollar and slide in the oil price.

Copper inventories fell a net 3,800 tonnes to 156,675 tonnes and cancelled warrants dropped 3,700 tonnes to 36,525 tonnes.

Meanwhile, SHFE stocks have fallen more than 26,000 tonnes; there is growing speculation location that metal will continue to out to LME warehouses in the coming weeks.

Aluminium at $1,537 was down $7; stocks fell 4,825 tonnes to 2,584,400 tonnes.

Nickel was $10 lower at $8,620 although stocks fell 1,674 tonnes to 412,344 tonnes. In a move centred on Vlissingen, cancelled warrants dropped 4,116 tonnes to 120,720 tonnes. The cash/May date is looking tight at a small contango of just $1.

Zinc at $1,871 was up $1, with stocks and cancelled warrants both down 1,125 tonnes at 390,375 tonnes and 25,375 tonnes respectively. Lead at $1,713 was up $2 after a marginal stock increase of 25 tonnes to 176,075 tonnes.

Tin is stuck under $17,000 but recent trade at $16,790 was up $115. Stocks rose 100 tonnes to 6,425 tonnes – the highest since September last year – with the Port Klang and Singapore totals steadily rising.

Cobalt was indicated at $22,900/25,000; cancelled warrants rose three tonnes to 63 tonnes. Steel and molybdenum were neglected.

(Editing by Mark Shaw)