LME base metals prices mixed; China on holiday

Base metals on the London Metal Exchange were mixed in morning trading on Monday June 10, with three-month prices lacking direction amid thin traded volumes due a public holiday in China, the largest market for base metals

Three-month futures prices at 5pm on Monday June 10, compared with the 5pm close of trading on Friday:
Copper: $9,828 per tonne, up by 0.67%
Aluminium: $2,572 per tonne, down by 0.23%
Nickel: $18,040 per tonne, up by 0.05%
Zinc: $2,805.50 per tonne, up by 1.39%
Lead: $2,198.50 per tonne, down by 0.05%
Tin: $31,500 per tonne, up by 0.15%

“Local holidays in Australia and China will keep trade volumes light on Monday June 10,” Fastmarkets analyst James Moore said.

Some 1,900 tonnes of copper were delivered into LME warehouses, with 1,200 tonnes delivered to Singapore and 700 tonnes delivered to Kaohsiung.

Taken alone, a 700-tonne delivery into Kaohsiung is insignificant, but the move continues a trend of copper deliveries into LME warehouses in East Asia. East Asian copper stocks now stand at 60,475 tonnes, up 145% from 24,675 since the start or May.

Global copper stocks, however, are up 8% to 125,325 tonnes.

The deliveries in East Asian warehouses had been expected by a number of market sources, due to the wide arbitrage between Shanghai Futures Exchange prices and LME prices. Chinese market participants had been expected to deliver material onto the LME to take advantage of the arbitrage.

Zinc recorded the biggest price gain in morning trading, gaining 1.4% compared with Friday’s close.

The uptick in zinc prices may be due to physical tightness in the market, according to Marex analyst Ed Meir.

“In the physical market, the market remains deeply short of concentrates, as reflected in [treatment charges] for imported concentrate into China now reaching lows not seen since June 2018,” Meir said.

“Although the supply situation is expected to remain tight, especially on the mining side, June traditionally represents a weak seasonal period for prices as well,” Meir added.

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