LIVE FUTURES REPORT 15/09: Copper price recovers despite more deliveries; nickel continues to fall

Base metals prices on the London Metal Exchange were broadly higher this morning, Friday September 15, following a weak performance over the past two days.

Nickel prices have bucked the upward trend today and have fallen a further $115 per tonne, this follows a 1.9% drop on Thursday as prices test the $11,000-per-tonne level.

The three-month copper price has bounced back above $6,508 per tonne despite a fourth consecutive day of inventory increases. Today, 31,375 tonnes have been delivered into LME-listed warehouses, the majority in Port Klang, taking the total net rise in stocks since Tuesday to 95,925 tonnes.

“The corrections in the LME base metals prices continue for the most part, although some underlying tails on recent chart candlesticks suggest some dip buying,” Metal Bulletin senior analyst William Adams said.

“For now we would let these corrections run their courses, but given a general back drop of better economic data and an image of concerted global growth, albeit slow, we would be on the lookout for bases to build and for that to provide another buying opportunity. With the dollar still attempting a rebound any rebound in base metals prices may be delayed, or laboured,” he added.

The dollar’s rebound has halted for now lending some slight support to the base metals, as it dips back below Thursday’s rebound high of 92.66.

Lead was the surprise on Thursday climbing 1.2% on the back of strength in China, the metal is trading $19 higher this morning. Zinc and tin prices also climbed higher while aluminium remains little changed.

Copper prices recover slightly

  • The three-month copper price was $10 higher at $6,508 per tonne.
  • Cancelled copper now makes up just 28% of total stock, down from over 50% just two weeks ago.
  • SHFE copper stocks fell by 3.5% or 6,100 tonnes to 172,847 tonnes in the past week.
  • In spreads, cash/three-month is now at $41.96 per tonne contango.
  • “…Investor positioning [has been] sitting at record high net long position on the LME in recent days. This was enough to induce some investors to lock in their recent gains,” ANZ Research noted.

Base metals prices

  • The three-month aluminium price dipped $3 to $2,095 per tonne. Stocks declined 2,375 tonnes to 1,313,400 tonnes.
  • Nickel’s three-month price plummeted a further $115 to $11,085 per tonne. Inventories increased 438 tonnes to 384,078 tonnes.
  • The three-month zinc price was up $21 to $3,027 per tonne. Stocks declined 1,550 tonnes to 263,750 tonnes.
  • Lead’s three-month price increased $19 to $2,326 per tonne. Inventories declined 175 tonnes to 163,125 tonnes.
  • The three-month tin price was up $80 to $20,615 per tonne. Stocks were unchanged at 1,955 tonnes.

Currency moves and data release

  • The dollar index was down 0.08% to 91.92.
  • In commodities, the Brent crude oil price was up 0.15% to $55.35 per barrel.
  • The Bank of England (BoE) Monetary Policy Committee voted 7-2 to leave rates unchanged at 0.25%, but stated that it may need to adjust policy “over the coming months.”
  • The economic agenda is busy today with the EU’s trade balance, the UK’s BoE quarterly bulletin and CB leading index as well as a host of US data including retail sales, the Empire State manufacturing index, capacity utilisation rate, industrial production and preliminary University of Michigan consumer sentiment.
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