LIVE FUTURES REPORT 27/09: LME base metals strengthen; lead prices buck the upward trend

Base metals prices on the London Metal Exchange mostly strengthened this morning, Wednesday September 27, with lead the only base metal to decline.

The three-month copper price bounced up by $48.50 higher this morning as stocks begin to decline again; 13,350 tonnes was freshly cancelled in across multiple Asian locations.

“LME stocks continue to decline mainly via the cancellation of warrants route but more eyes will be in the SHFE stocks at the end of the week where there are rumours of large drawdowns in copper,” Malcolm Freeman of Kingdom Futures said in a note.

Nickel prices continue to recover, trading $127 per tonne higher but remain under pressure below $11,000 per tonne.

The three-month zinc price was most recently trading at $3,128.50 per tonne – the price is being supported by tightening supply as the LME cash/three-month spread remains in backwardation.

Copper prices

  • The three-month copper price is up $48.50 to $6,459.50 per tonne.
  • Stocks declined a net 3,200 tonnes to 301,950 tonnes, with 13,350 cancelled – 7,850 in Busan and the rest in Gwangyang, Kaohsiung and Singapore.
  • The increased possibility of a US rate increase at the end of the year will check the rebound of copper prices, China’s Minmetals Jingyi Futures said on Wednesday morning.
  • The speech by US Federal Open Market Committee chairwoman Janet Yellen on Tuesday was interpreted by markets as hawkish as she noted that it would be “imprudent” to keep monetary policy on hold until inflation reaches 2%, thus lending weight to the possibility of a US rate increase in December.
  • “While there remains concerns over China’s economic health in the second half of this year, the arrival of the peak period for demand will provide support for [copper] prices,” the Chinese broker added. The September-October period is traditionally the peak period for demand in China.
  • In copper data, China’s imports of refined copper rose 9.8% year on year but eased 10.1% month on month to 254,762 tonnes, while that for copper ores and concentrates fell 0.2% year on year but rose 2.9% in the month to 1.44 million tonnes in August.

Base metals prices

  • The three-month aluminium price edged up $3.50 to $2,129.50 per tonne. Stocks declined 4,800 tonnes to 1,280,100 tonnes.
  • Nickel’s three-month price was up $127 to $10,535 per tonne. Inventories were up 1,860 tonnes to 385,158 tonnes.
  • The three-month zinc price increased $13.50 to $3,129.50 per tonne. Stocks declined 975 tonnes to 259,350 tonnes.
  • Lead’s three-month price declined $10 to $2,478 per tonne. Inventories dipped 1,750 tonnes to 157,500 tonnes.
  • The three-month tin price edged $5 higher to $20,715 per tonne. Stocks were unchanged for the second day in a row at 2,070 tonnes.

Currency moves and data releases

  • The dollar index was up 0.45 to 93.45.
  • In other commodities, the Brent crude oil spot price declined 0.56% to $58.22 per barrel.
  • The economic agenda is light today with mainly US durable goods orders, pending home sales and crude oil inventories due later today.

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