LIVE FUTURES REPORT 13/09: Copper, zinc prices drop on big LME stock deliveries

The three-month copper price has fallen a further 1% this morning as 32,550 tonnes were delivered into LME warehouses – the majority of the stock was delivered into Rotterdam with 1,925 tonnes sent to Hull and the remaining 950 tonnes arriving in Busan.

This follows 12,425 tonnes of copper cathodes delivered on Tuesday as a fierce copper backwardation on the exchange collapsed. Cash to three-month is now trading at $43.75 contango.

It is a similar story for zinc as a further 14,725 tonnes were delivered to LME sheds today, adding to the 13,700 tonnes yesterday – all volumes were delivered into Antwerp.

“The zinc inflow was unusual in that it did not occur in New Orleans, the usual location for mass zinc moves on and off the books. The inflow may come from some material that has been believed to be sitting off-warrant in [northwest] Europe for a few years,” noted Macquarie.

Nickel prices also retreated $280 this morning as it continues to try and correct after surging above $12,000 tonnes last month. Tin was the only base metal to trade in positive territory.

Copper stocks dampen prices

• The three-month copper price fell $72 to $6,596 per tonne.
• Stocks increased a net 27,850 tonnes to 246,575 tonnes.
• “We had wondered in recent weeks whether the trend of large stock deliveries would be seen in early September. We saw stocks shoot up in March, May and July, so the sequence/series would suggest September as well,” Metal Bulletin senior analyst William Adams said.
• “Copper prices have risen by more than 25% year-to-date, and we expect some profit-taking in the very near term. The outlook for copper remains very positive nevertheless, given continuing market deficits. Miners are anticipating further tightness in supply as a consequence of lost production this year, notably from the Escondida, Cerro Verde [Chile] and Grasberg [Indonesia] mines,” SG Market Research noted.

Base metals prices mainly lower; bar tin

• The three-month aluminium price dipped $5.50 to $2,131.50 per tonne. Stocks declined 1,925 tonnes to 1,317,025 tonnes.
• Nickel’s three-month price dropped $280 to $11,710 per tonne. Inventories were up 366 tonnes to 383,256 tonnes.
• The three-month zinc price was down $11 to $3,050 per tonne. Stocks were up 13,075 tonnes to 267,050 tonnes.
• Lead’s three-month price dipped $27 to $2,284.50 per tonne. Inventories declined 225 tonnes to 163,550 tonnes.
• The three-month tin price was up $20 to $20,695 per tonne. Stocks increased 70 tonnes to 2,015 tonnes.

Currency moves and data releases

• The dollar index was down 0.08% to 91.82.
• In other commodities, the Brent crude oil price was up 0.68% to $54.56 per barrel.
• In data today, UK employment figures, EU industrial production and US PPI and crude oil inventories are due.