LIVE FUTURES REPORT 24/07: LME aluminium price rises on fresh 52kt cancelation; zinc climbs 1%

Aluminium prices on the London Metal Exchange moved higher during morning trading on Tuesday July 24, after a fresh cancelation exceeding 50,000 tonnes resulted in total on-warrant stock falling by more than 8% this week.

Edging 1.2% higher over the morning, the LME’s three-month aluminium price pushed back over $2,100 per tonne for the first time in two weeks.

Buoyed by volatile spread movements over the course of the week – typified in Monday’s sharp swing in the light metal’s nearby cash/August spread – the metal’s cash/three-month spread has moved from a backwardation of $12.48 per tonne, to $11.50 per tonne contango over the morning trading session.

Meanwhile, speculation surrounding United States-imposed sanctions against UC Rusal have resurfaced after a period of inactivity over June and July, releasing widespread volatility into the market.

On Monday, the Russian aluminium producer’s share value climbed by 14.8% after the US suggested it was open to lifting sanctions against the company.

Elsewhere, a moderate uptick in copper prices has resulted in the metal’s three-month price finding support around $6,150 per tonne.

“Collective negotiations at Escondida copper mine in Chile are continuing to drag on. The current collective agreement expires at the end of this month, and the mine operator must make the union a new offer beforehand. If this is rejected, government-led mediation talks will be held,” Commerzbank Research said in a morning note.

“If these yield no result either, a strike could ensue from mid-August. This could see the global copper market, which according to data from the International Copper Study Group was in surplus in the first four months of the year, slide back into deficit,” it added.

While lead’s three-month price was the only metal to record a marginal loss, broad stability in nickel, zinc and tin prices remain indicative of a brighter tone to metals trading this week, despite ongoing pressure from global trade tensions.

Base metals push higher; lead, tin consolidate

  • The three-month copper price recently traded at $6,165 per tonne, a $35 rise from Monday’s close. Stocks fell a net 275 tonnes to 254,425 total tonnes, with 1,250 tonnes freshly canceled across Europe and Asia.
  • Aluminium’s three-month price climbed $26 to $2,095 per tonne. Inventories increased by 2,850 tonnes to 1,212,125 tonnes, with some 52,650 tonnes freshly canceled across Europe and Asia.
  • Nickel’s three-month price recently traded $55 higher at $13,455 per tonne. Inventories were stable at 260,718 total tonnes, with 1,104 tonnes freshly canceled across Europe and Asia.
  • The three-month zinc price climbed $24 to $2,579 per tonne. Stocks fell 750 tonnes to 249,650 tonnes.
  • Lead’s three-month price recently traded at $2,132 per tonne, a $2 dip from Monday’s closing price. Inventories were up 300 tonnes to 127,675 total tonnes.
  • The three-month tin price was stable at $19,475 per tonne, while inventories fell 135 tonnes to 3,075 total tonnes.

Currency moves and data releases

  • The dollar index was up 0.05% at 94.69.
  • In other commodities, Brent crude oil was up 0.07% at $72.96 per barrel.
  • In US data on Monday, existing home sales came in at 5.38 million, below the forecast of 5.46 million.
  • In data today, we have flash manufacturing purchasing managers’ indices (PMI) from France, Germany, the European Union and the United States. The US’ Richmond Manufacturing Index is also due.