LIVE FUTURES 05/10: LME copper prices rise on earthquake in Chile; other base metals dip

Copper hit highs of $6,567.50 per tonne, 0.7% higher than Wednesday’s close price, on reports that a 5.4 magnitude earthquake has hit the Calama region in Northern Chile.

The rest of the complex were mostly trading lower than the previous day’s 5pm close, with zinc beginning to consolidate at current levels.

Zinc’s three-month price has recently been buoyed by renewed bullish sentiment amid further stock declines, but fell $15 per tonne this morning. Nearby tightness in zinc continues with the cash/October spread at $30 per tonne backwardation and cash/three-months at $62.50b per tonne.

Aluminium, nickel and lead prices all dipped a few dollars while the Chinese markets remain closed for the country’s National Golden Week holiday from 2-8 October.

“Traders [in the commodities market] are likely to remain cautious leading up to this week’s US jobs report. However, liquidity will remain low with China’s markets closed,” ANZ Research said on Thursday.

Copper edges higher

• The three-month copper price is trading $43 per tonne higher at $6,555 per tonne.
• Stocks declined a net 2,450 tonnes to 295,075 tonnes with 1,600 tonnes freshly cancelled.
• “The news of the earthquake [in Chile] has filtered through to the market and is boosting the price, it’s in the area of the northern mining regions and it will be interesting to see if anything is disrupted,” one market participant said. 
• The International Copper Study Group estimates that the global refined copper market recorded a deficit of 70,000 tonnes in June (for a fourth consecutive month), pushing the supply/demand balance to a deficit of 75,500 tonnes in January-June 2017. In January-June 2016, the refined market recorded an even larger deficit of 405,000 tonnes. 

Base metals

• The three-month aluminium price was down $6.50 to $2,159.50 per tonne. Stocks declined 2,350 tonnes to 1,249,350 tonnes.
• Nickel’s three-month price dipped $5 to $10,610 per tonne. Inventories dipped 606 tonnes to 387,222 tonnes.
• The three-month zinc price edged $15 lower to $3,285 per tonne. Stocks declined 675 tonnes to 251,075 tonnes.
• Lead’s three-month price was $6 lower at $2,553 per tonne. Inventories declined 875 tonnes to 155,525 tonnes.
• The three-month tin price was $20 higher at $20,795 per tonne. Stocks dipped 100 tonnes to 19,750 tonnes. 

Currency moves and data releases

• The dollar index halted its decline after the release of strong US economic data on Wednesday; it was most recently up 0.01% to 93.49.
• In other commodities, the Brent crude oil spot price was up 0.74% to $56.15 per barrel. 
• The ADP non-farm employment change in September came in at 135,000, above an expected reading of 131,000, while the ISM non-manufacturing purchasing managers’ index (PMI) for September stood at 59.8, higher than the forecast of 55.5. 
• “The [ISM manufacturing] index is now at its highest since August 2005 and is a sign that the US economy is recovering quickly from hurricane-related disruptions,” National Australia Bank said on Thursday. 
• Economic data of note today includes US unemployment claims, trade balance and factory orders. The US non-farm payrolls report due on Friday will also be closely watched by investors.
• In addition, US Federal Open Market Committee members Jerome Powell and Patrick Harker are due to speak later.