LIVE FUTURES REPORT 03/10: LME zinc price continues to rise; all base metals close higher

The three-month copper price closed back above $6,500 per tonne, despite stocks increasing; the metal is beginning to consolidate at current levels following increased fluctuation during September.

“Copper prices continue to consolidate having run ahead of the fundamentals, while the market pauses during the Golden Week holiday [2-8 October] and before the National People’s Congress, which starts on October 18,” Metal Bulletin analyst James Moore said.

“Overall we maintain a bullish view for copper’s fundamentals because improving demand and supply disruptions are set to tighten the supply/demand balance,” Moore added.

The three-month zinc price is continuing to lead the upward trend hitting a new ten-year peak at $3,292 per tonne earlier today. Zinc prices continued to derive support from tight supply and the persistent large backwardations in spreads.

The lead price took its cue from zinc’s strength, and closed $73 per tonne higher than Monday’s 5pm close price.

Nickel prices continued to rebound, trading a further $280 per tonne higher as it aims to get back above $11,000 per tonne.

“As we enter the fourth quarter, and with positive manufacturing data continuing to come from both China and USA, prices are generally steady,” noted Sucden Financial.

Zinc prices climb higher

• The three-month zinc price was up $28 to $3,264 per tonne.
• Stocks declined a net 1,025 tonnes to 252,225 tonnes, following 16,950 tonnes being cancelled yesterday – the majority of which are in Antwerp. 
• Warrants are in tight hands with one market player holding 90-100% of warrant holdings, tom/next and cash positions.
• “Zinc has pushed to fresh highs as the jump in cancellations yesterday renewed bullish sentiment. Price gains continue to attract large volumes of forward selling, while the LME forward bandings suggest the shorts are standing their ground,” said James Moore, Metal Bulletin senior analyst. 
• “With visible stocks still drifting lower, the underlying fundamentals remain supportive, which should support further price gains.”

Base metals prices

• The three-month copper price was up $27 to $6,520 per tonne. Warehouse stocks were up 6,550 tonnes at 302,050 tonnes, with 6,675 tonnes warranted in Gwangyang. 
• Aluminium’s three-month price closed at $30 to $2,131 per tonne. Inventories fell 3,550 tonnes to 1,225,475 tonnes. 
• The three-month lead price increased $73 to $2,591 per tonne. Stocks were down 575 tonnes at 156,900 tonnes. 
• Nickel’s three-month price gained $230 to $10,620 per tonne, with stocks declining 1,782 tonnes to 382,734 tonnes. 
• The three-month tin price was $125 higher at $20,800 – inventories fell 25 tonnes to 2,045 tonnes.

Currency moves and data releases

• The dollar index was down 0.09% at 93.52, having earlier hit 93.92, which was the highest since August 17. 
• In other commodities, the Brent crude oil spot price was 0.18% higher at $55.90 per barrel. 
• The economic agenda is lighter today – Europe’s August producer price index rose 0.3% against a forecast 0.1% increase. 
• Later, US Federal Open Market Committee member Jerome Powell is speaking in Washington DC, USA.