LIVE FUTURES REPORT 24/04: LME Ali, nickel continue drop; copper finds support

Base metals on the London Metal Exchange were broadly lower at the close of trading on Tuesday April 24, with aluminium and nickel continuing to drop.

The three-month nickel price dropped below $14,000 per tonne for the first time since April 13, with volumes traded at their lowest since April 6.

“Trade tensions dragged nickel into the spotlight, but fundamentals have come back in to play,” Geordie Wilkes, head of research at Sucden Financial, said at Sucden’s Quarterly Metals Report Briefing.

“On the whole, there are a lot of moving parts in the nickel market. Sanctions would certainly raise volatility, but we see the price remaining well-supported in the short term,” he added.

Similarly, aluminium’s three-month price has dropped 10.5% over two days, making significant drops to pre-sanction figures around $2,000 per tonne.

Aluminium’s price began to drop after the US announced on April 23 that no further sanctions would be imposed against Rusal, nor any of its subsidiaries.

Volumes and cancellations remain high for aluminium however, with supply uncertainties still clouding market sentiment.

Comparatively, copper’s three-month price found support during the afternoon, closing above $7,000 per tonne and climbing 2% over the day.

“Ongoing labor negotiations at BHP’s Escondida mine (the world’s largest mine production site, producing 18% of Chilean copper) represent a key risk to supply,” Boris Mikanikrezai, analyst at Metal Bulletin said.

“Encouragingly, workers have agreed to early talks with management, which is a positive signal and thus lowers the likelihood of strike action,” he added.

Zinc continues to remain in consolidation, with Sucden Financial’s Liz Grant suggesting that the metal could be well-supported in the near term.

“Technical tightness on the exchange has little relation to physical supply. The zinc market is looking for something new and the galvanizing sector could be looking to benefit from stable production in the US and Europe,” Grant added.

Elsewhere, tin’s three-month price found marginal stability after dropping below the $21,500 per tonne mark. The metal’s cash/three-month spread has moved from a backwardation of $290 to $265b per tonne.

Aluminium, nickel continue drop

  • The three-month copper price climbed $70 to $7,013 per tonne. Stocks fell a net 3,100 tonnes to 348,725 tonnes.
  • Aluminium’s three-month price fell $68 to $2,227 per tonne. Inventories dipped 6,675 tonnes to 1,378,350 tonnes.
  • The three-month nickel price dropped $285 to $13,990 per tonne. Stocks were down 588 tonnes at 312,324 tonnes.
  • Zinc’s three-month price dipped $17 to $3,212 per tonne. Inventories dropped 1,850 tonnes to 181,325 tonnes.
  • The three-month lead price was down $10 at $2,310 per tonne. Stocks were up 200 tonnes at 131,150 tonnes.
  • Tin’s three-month price increased $50 to $21,100 per tonne. Inventories dipped 10 tonnes to 2,180 tonnes.

Currency moves and data releases

  • The dollar index was down 0.05% at 90.86.
  • In other commodities, Brent crude oil was down 0.33% at $74.79 per barrel.
  • In US data, CB consumer confidence for the period of April was 128.7, with new home sales recorded at 694,000 for March. The Richmond manufacturing index for April was recorded at -3, down from 15 previously.
  • The US House Price Index (HPI month on month) was recorded at 0.6% for the February period, while S&P/CS composite-HPI year on year was at 6.8% across the same period.
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