Market and product
Base metals prices range-bound; plagued by low volumes
With little news headlines out, except for the lacklustre Germany factory order out last night which showed a contraction of 5.7 percent, metal prices tended to follow dollar movements.
“With Chinese traders still away for golden week it was a particularly quiet day on the LME with prices tending to track movements in the USD, being bereft of other influences,” said a note from Sucden Financial.
In currency markets, the strong dollar pulled back slightly, last seen against the euro at 1.2615. Profit taking hit the save haven asset, after it rose to a two year peak against the dollar last Friday.
The World Bank yesterday also announced a cut in its 2014-2016 for East Asia and the Pacific region to 6.9 percent in 2014 and 2015, down from the initial 7.1 percent estimate. The Bank now expects growth in China to slow to 7.4 percent in 2014 and 7.2 percent in 2015, down from 7.7 percent in 2013.
“China’s growth is expected to slow as the government implements policies to address financial vulnerabilities and structural constraints”, the World Bank said.
In the metals, copper is up a modest $2 in price to $6,712 per tonne; volumes are currently at less than 200 contracts done. Spreads remain tight, with benchmark Cash/threes at around $40.60 back, Cash/Nov at $21 back and Cash/Dec at $32.50 back.
“In terms of our outlook, we don’t expect to see much over the next few days as the Chinese markets are still closed. However, we would not be surprised to see metals work slightly higher over the course of the week given that the dollar rally may be stalling for a few days in light of this being a slow week, numbers-wise,” analyst Edward Meir from INTL FCStone said.
Aluminium at $1,932 is up $3 in price while nickel fell $34 to the current $16,666 per tonne. The latter continued to see stocks climbing to a fresh all-time high at 3,643,332 tonnes following an increase of 1,230 tonnes on Monday. Traders are saying that price for the latter might have gone too low compared to supply fundamentals.
In others, zinc at $2,310 is flat while sister metal lead is up $4 at $2,107 per tonne.
The tin price was last at $20,410, a $70 decline with stocks unchanged at 9,270 tonnes.
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