Metals prices nudge higher, low-key boost from China’s return

Base metals ticked higher during modest LME pre-market trading on Monday, October 10 although China’s return from week-long holidays only had a low-key impact on the complex, which remains content to range-trade for now, traders said.

“It is a little bit perkier but [there is] not too much going on. We had expected more with China back but the markets are looking cautious still,” a trader said.

In the metals, the three-month aluminium price was robust, hitting a seven-week high, while the nickel price moved up to its highest for a week. The rest of the metals largely eked out small gains.

China had been absent last week for Golden Week, which had resulted in choppy price moves and thin liquidity. Business was less jerky this morning while data from China over the weekend showed the Caixin Services PMI at 52.0 against the previous 52.1.

In currencies, the dollar regained some ground and stood around 1.1180 against the euro – it had dipped on Friday afternoon after US non-farm payrolls data for September at 156,000 was considerably below the forecast of 171,000.

“US jobs data was poor, which is good for dollar-denominated commodities – but it still points to a weaker economic outlook,” another trader noted.

In a quiet data calendar today, there will be EU Sentix investor confidence of note.

In the metals, the nickel price was last at $10,370 per tonne, off its $10,460 high but still up $60 on Friday’s close. Warehouse stocks rose a net 546 tonnes from what had been the lowest since October 2014 to 360,828 tonnes. Investors remained nervous, however – talk that Indonesia could restart ore exports would result in more metal availability.

The three-month LME copper price at $4,808 per tonne was up $33, with chart support anticipated on dips towards $4,750. Inventories fell 4,625 tonnes to 350,675 tonnes.

A strike by around 1,000 workers at Freeport-McMoRan’s Grasberg mine in Indonesia has ended after lasting a little more than a week, “with the onsite mill said to have adjusted running rates in response”, SP Angel noted 

Three month aluminium at $1,682 per tonne was up $7 – it found support from spread tightness and inventory withdrawals. Stocks dropped 6,700 tonnes to 2,120,250 tonnes, the lowest since December 2008.

The three-month zinc price was $16 higher at $2,341 per tonne, with inventories falling 150 tonnes to 457,275 tonnes. Lead’s three-month price was up $31 at $2,107 per tonne, while stocks declined 150 tonnes 190,700 tonnes.

Sizeable rewarrantings continuted – another 4,650 tonnes were put back on warrant in Bilbao, with total available stocks rising 5,575 tonnes

The three-month tin price was $110 higher at $20,110 per tonne, having seen some profit-taking from last week’s 21-month high of $21,150. Stocks are becoming scarce, with the 25-tonne fall bringing the total down to 3,420 tonnes, the lowest since November 2008. The cash/threes spread was last at a backwardation of $82.

Steel billet, cobalt and molybdenum were all neglected.

(Additional reporting by Kathleen Retourne, editing by Mark Shaw)