Base metals drifted modestly lower during a slack Wednesday LME premarket session, with the absence of significant short-term drivers resulting in a low-key wind-down to the forthcoming Easter holiday closures.
Otherwise, the complex took little heart from a steadier dollar, which was trading around 1.1190 against the euro. In other markets, equities were also lower while crude oil prices were struggling.
“With the dollar rising and with the Easter holiday ahead, the markets may well see some profit-taking and book-squaring emerge, which is likely to lead to some consolidation, but we would expect dips to be well supported,” William Adams of Fastmarkets said.
Political unrest has returned to the forefront following the detonation of three deadly bombs in Brussels – more than 30 people were killed – on Tuesday for which the so-called Islamic State has taken responsibility.
The reaction on metal markets was minimal; traders said that the sad fact of the matter is that events such as these are priced in as tensions continued to build.
The economic data agenda is light today, with only US new home sales released this afternoon of note.
Volatility could increase later this week when the Easter holiday removes liquidity from the market, creating the potential for outsized price movements. UK and US markets are closed from Friday, with London not reopening until Tuesday.
In the metals, copper was again confined to a narrow range, pivoting around $5,050. Recent business at $5,057 per tonne was down $8 on Tuesday’s close. Warehouse stocks declined a net 1,300 tonnes to 150,675 tonnes, a fresh low since October 2014.
The backwardation in spreads remains in play, with the benchmark cash/threes trading at $23. A dominant holder continues to make its presence felt – LME data last showed there was one holder across all three positions in the 50-79 percent bracket.
Aluminium backed away under $1,500 to set the lowest since February 11 at one stage before holding at $1,494, a $7 loss – prices had attracted some forward buying. Inventories declined 7,975 tonnes to 2,829,300 tonnes.
In others, zinc slipped back after earlier nudging towards the five-month highs hit at the start of the week. It traded at $1,863, a $10 loss, although stocks fell 1,600 tonnes to 439,750 tonnes, the lowest since August 2015.
Lead dropped to $1,805, a $10 loss also – inventories, however, declined 1,600 tonnes to 159,900 tonnes, the lowest since December 2015.
Nickel eased $15 to $8,775, while stocks rose a punchy 1,962 tonnes to 437,110 tonnes. Tin at $17,075 was $75 lower – inventories increased 30 tonnes to 4,400 tonnes.
Steel billet, cobalt and molybdenum were neglected.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)