As a result, the US dollar index breached the 93 mark while both the LME three-month nickel and zinc prices lost significant ground after gathering support over the week.
Nickel’s outright price on the LME was recently at $14,950 per tonne, down by some 1.71% from Wednesday’s closing price of $15,226 per tonne, while turnover was moderately high after more than 3,800 lots had changed hands as of 10.15am London time.
LME zinc’s underlying price was recently trading at $2,481 per tonne, falling more than 1.8% from Wednesday’s closing price of $2,528 per tonne, while turnover was high with more than 4,200 lots exchanged as of 10.25am London time.
Despite forward selling, both metals continue to trade in contango markets, while demand remains bolstered by end-use applications in a more robust global steel sector. Equally however, both LME nickel and zinc inventories remain well supplied across the LME’s warehouse network, at more than 200,000 tonnes of material held across the exchange respectively.
LME nickel’s benchmark cash/three-month spread was recently trading at $53.50 per tonne contango, while LME zinc’s cash/three-month spread last traded at $20.15 per tonne contango.
“So the Fed have decided that rates will stay unchanged until 2023 and data shows that the US economy will only shrink by 3.4% as opposed to the higher forecasts of 5.7% and you would think that to be positive for metals prices,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.
“However, since the opening today there has been constant selling as investors did not get any more promises of further US economic stimulus packages and of course the ever ‘helpful’ algorithms have added to the selling,” he added.
Elsewhere in the complex, the three-month copper price was recently trading at $6,732 per tonne on Thursday morning, down by around 0.8% from Wednesday’s closing price of $6,777 per tonne, while turnover topped the complex at more than 8,500 lots exchanged as of 10.30am London time.
LME copper’s benchmark cash/three-month spread remains the only backwardated spread among its peers, with the spread recently trading at $18.80 per tonne backwardation.
Other highlights
- In other commodities, Brent crude oil futures were down by 0.64%, recently trading at $42.56 per barrel.
- The West Texas Intermediate (WTI) oil price was recently at $40.19 per barrel, a decline of 0.86%.
- Meanwhile, the US dollar index remained in negative territory but pushed slightly higher, recently trading at 93.25.
- In economic data expected from the United States this afternoon, the Philly Fed Manufacturing Index is due, in addition to weekly unemployment claims.