Metal prices mixed, investors cautious despite rally in Asian stocks – LME MORNING

Base metals prices were mixed but little changed during early London trading on Monday, even as global risk appetite seems to have improved, led by a rally in Asian stocks earlier.

“The base metals complex appears to have found its feet, with an initial sell-off giving way to short-covering and dip-buying interest. While concerns over global growth remain, the sel-loff appears to have been overdone, and prices are now stabilising,” Standard Bank said in a research report.

The rebound in stocks was aided by trends in Asian equity markets, where temporary stability was seen following Friday’s better-than-expected US economic data. But concerns over slowing economies other than the US and signs of a recession in Europe continue to keep investors on their toes.

Japan’s Nikkei 225 was up close to four percent during Asian trading, while the Shanghai Composite was up almost 0.7 percent. The optimism in Asia, however, did not spill over to the European markets, with the FTSE 100 currently down 0.23 percent and the DAX trading 0.64 percent lower.

The focus will largely be on China over the week ahead – the country is due to release several key economic indicators. On Tuesday, industrial production is expected to have grown 7.5 percent, up from the previous 6.9 percent while third-quarter GDP  is expected at 7.2 percent, below the central government’s target of 7.5 percent. On Thursday, the preliminary HSBC China Manufacturing PMI will cast some clarity on China’s economic growth.

The data agenda is fairly light today, with the German Producer Price Index (PPI) and the EU trade balance both lower than expected at zero and at 18.9 billion euros respectively, below the predicted 0.1 percent and 21.3 billion euros.

In the metals, trading volumes have been slightly lower than usual, with industry participants in London for the annual LME Week.

Copper at $6,612 per tonne was down $28 in price on Friday’s close. Stocks ticked a net 100 tonnes lower to 157,725 tonnes and cancelled warrants were 100 tonnes lower at 26,225 tonnes.

“Given the supply/demand balance and the slowdown in China and Europe, we think copper’s slightly bearish fundamentals are at last being taken notice of; this might lead to lower prices for a while but we expect good scale-down buying interest to cushion the fall,” FastMarkets research analyst Tom Moore said.

Zinc lost $6 to $2,242 although stocks were 1,575 tonnes lower at 721,575 tonnes and cancelled warrants climbed  7,450 tonnes to 146,725 tonnes.

The aluminium price at $1,982 was up $10 – stocks were down 9,975 tonnes at 4,507,500 tonnes and cancelled warrants declined 9,975 tonnes to 2,680,550 tonnes.

Nickel was slightly lower at $15,682, down $18 on Friday’s close. Stocks continue to hit fresh new highs, reaching 376,506 tonnes after an increase of 1,014 tonnes this morning. Cancelled warrants were 672 tonnes lower at 88,350 tonnes.

Tin at $19,390 was up $85 – stocks and cancelled warrants were both 25 tonnes lower at 9,155 tonnes and 445 tonnes respectively.

In the minors, both cobalt and molybdenum prices were neglected, although there was another stock increase in the latter to 156 tonnes, up 12 tonnes.

(Editing by Mark Shaw)