Base metals were generally ranging comfortably during Tuesday LME premarket trading, aided by a lower dollar and firmer crude oil prices.
These factors principally underpinned an upswing in copper back above the $4,700 level and away from two-month lows. But price movements in most of the metals were low-key and volumes, apart from copper, were not notable – the complex’ current pattern of broad-based consolidation is set to continue in the coming sessions, traders said.
“Copper looks as if will be supported on the dips to $4,600 but there is a lot of work to do to get back to $5,000 or above. The softer dollar is helping today but we think the markets are going to hang around here for a while,” a trader said.
In other markets, equities were drifting in Europe while the dollar slipped back against the euro to around 1.1450. Brent crude oil moved up to around $43.30 per barrel ahead of an OPEC meeting starting on April 17 that is likely to influence broader macro-economic sentiment.
“The markets will look to the headlines mostly, I guess, which the funds and CTAs will trade off,” the trader added.
The economic data calendar is also relatively light. So far, German March consumer prices have risen the expected 0.8 percent; this afternoon’s US import prices figures are not expected to generate notable activity or movement. Later this week there will more important releases from China, including its trade balance and industrial production figures
Although the metals have, in recent sessions, seen downswings to multi-week lows in some cases, there appears to be some residual support on the downside preventing major price retreats. This is a possible indicator that sentiment is swinging away from being completely bearish.
“We would not be surprised if prices edge lower in the short term but we would expect good dip-buying to provide support and eventually lead prices higher, especially in those metals where there are not large stock overhangs,” William Adams of FastMarkets said.
In the metals, copper rose as high as $4,723 per tonne before settling at $4,709 per tonne, up $45 from Monday, when prices touched a two-month low of $4,633.50. Warehouse stocks fell a net 900 tonnes to 146,450 tonnes.
Aluminium was holding above $1,500, but was confined to narrow-range, low-volume trading. Business at $1,511 was up $2.50 from the previous close. Inventories fell 7,450 tonnes to 2,735,200 tonnes, the lowest since January 2009.
In others, zinc traded at $1,785, a $22 advance, with stocks dropping 6,025 tonnes to 423,725 tonnes, the lowest since August 2009. Lead was unchanged at $1,697, with a 100-tonne fall in stocks to 155,650 tonnes, a four-month low.
Nickel edged up to $8,660, a $105 gain, but inventories were 198 tonnes higher at 428,640 tonnes. Tin was trading at $16, up $95; stocks rose 60 tonnes to 4,915 tonnes.
Steel billet, cobalt and molybdenum were neglected.
(Editing by Mark Shaw)