Metal prices firm in recent ranges on upbeat economic data

Base metals consolidated from session highs during late LME trading on Tuesday although the complex looked set to consolidation within recent ranges as macro data supports a firmer economic environment.

The copper price rose to its highest for nearly three months at one stage on Tuesday before settling in range-trade.  The aluminium price peaked to its highest for around one month, while the rest of the metals generally held at steady levels.

There was a string of positive US data releases which supported sentiments – Durable goods orders unexpectedly rose 0.8 percent in April – they had been seen falling 0.5 percent.

The Conference Board consumer confidence also advanced from 81.7 to 83 in May as “Americans turned more optimistic on the economy, stock prices and home values,” according to economists at OCBC in Singapore.

The US stock markets were buoyed by the upbeat US data, which also helped lift the US dollar broadly higher against most major currencies. Meanwhile, the euro was further weighed down by ECB Nowotny’s comments reinforcing market expectation for ECB to shift to more monetary easing on 5 June.

The euro was again under pressure around 1.3634 against the dollar, close to three-month lows of 1.3610.

In the metals, the copper price peaked at $6,966 before closing at $6,934 on Tuesday. Prices are now around $6,924.50, down almost $10 but tightness continued to flare in spreads- the cash/threes backwardation remained intense but has come down from $94 yesterday to the current $83.50.

Aluminium concluded at $1,828.50 and is currently down slightly to $1,824.50 per tonne. Stocks fell 8,650 tonnes to 5,221,950 tonnes and cancelled warrants increased 3,300 tonnes to 2,861,475 tonnes.

The nickel price was last $72 higher at $19,622. Stocks declined 96 tonnes to 280,308 tonnes, while tightness was evident in the nearby forward curve. It traded higher during the London hours yesterday to hit $19,761 as news that protests at Vale’s Goro nickel plant continue to prevent the plant from operating.

“The fact that the market ended the day in the red is a sign that the current bullish supports for nickel in recent weeks now seem to be fully priced in and the price seems set for further consolidation for some time to come,” said a note from Triland Metals.

In others, the lead price at $2,140 is down $2 and zinc lost $4.50 to the current $2,083 per tonne.

Tin gained $18 at $23,369 – there was no change in stocks. The cash/threes backwardation has come down to around $15 – at the start of last week it was above $100.