LIVE FUTURES REPORT 16/11: LME base metals prices continue slump; tin bucks the trend

“On the LME, markets remained nervous and conditions were still choppy. Price activity saw a tentative rebound through the morning session and buying on the US open but the move lacked momentum and largely faltered through the afternoon as the USD gained,” Sucden Financial noted.

Copper prices fell $36 per tonne at the close despite rebounding to highs of $6,813.50 per tonne earlier in the day.

“Base metals managed to erase a good part of their declines [on Wednesday] to finish unchanged to slightly higher, but the complex is certainly a shadow of its former self, unable to stage the post-sell-off rebounds that were readily prevalent for much of the last few months,” INTL FCStone analyst Edward Meir said.

“Prices ignored a weaker dollar [on Wednesday] and are still trading mostly on China-related variables, with the release of Monday’s macro-reports casting a long shadow and being the dominant restraining force,” Meir added.

Nickel also continued to suffer falling a further $320 per tonne – the metal has been correcting ever since it hit $13,000 per tonne after a ‘rollercoaster’ two weeks.

Lead and zinc followed the complex lower as traders say they are awaiting direction.

“There is little to move the prices higher at the moment, so things are in a bit of a slump,” one trader said.

Aluminium dipped $4 per tonne at the close but remained stable throughout the day – its declines are capped by support of capacity cuts in China which are set to be in place for the next few months.

The only metal to buck the downward trend was tin, edging $10 per tonne higher despite stocks at LME listed warehouses increasing 5% over the last two days.

Base metals prices

• The three-month copper price was down $36 to $6,737 per tonne. Stocks declined 3,900 tonnes to 251,550 tonnes.
• Aluminium’s three-month price declined $4 to $2,102 per tonne. Inventories dropped 4,350 tonnes to 1,161,475 tonnes, with 3,000 tonnes freshly cancelled.
• The three-month nickel declined $320 to $11,370 per tonne. Stocks fell 204 tonnes to 382,446 tonnes.
• Zinc’s three-month price was $6.50 lower at $3,145 per tonne. Inventories declined 2,850 tonnes to 229,250 tonnes.
• The three-month lead price was down $32.50 to $2,403.50 per tonne. Stocks increased 50 tonnes to 145,975 tonnes.
• Tin’s three-month price increased $10 to $19,350 per tonne. Inventories increased 65 tonnes to 2,145 tonnes.

Currency moves and data releases

• In a busy day for US economic data, weekly unemployment claims came in at 249,000, above the 235,000 forecast. October import prices also disappointed with a 0.2% increase – a gain of 0.4% had been expected – and the Philadelphia Federal Reserve manufacturing index stood at 22.7.
• Meanwhile, the country’s capacity utilization rate improved to 77%, besting the estimate of 76.3%, and industrial production month over month ticked up by 0.9%, beating the previous release of 0.4%.