Copper Stuck At $1950

Elsewhere in a routinely-traded metals complex the general trend was lower, with the exception of the zinc market which took advantage of recent fund interest to hit 5-1/2 month highs.

It has been a good week so far for volume, but it has just gone off the boil today, one trader said.

Coppers movements were again dictated by warehouse stock data, with a 8,650-tonne fall in inventories to fresh six year lows of 1,23,700 tonnes helping initiate a rally from early lows.

Traders were heartened by the overall fall in stocks, as well as the comparatively modest 1,100 tonnes delivered into Singapore. There has been concern of much bigger arrivals in Singapore, which would suggest the recent Chinese liftings are not for consumption. But the possibility remained that the run of stock drawdowns was reaching its end, and this induced some caution, preventing another upside challenge of $1,970, they said. Cash sales and speculative liquidation kept the market on the defensive around $1,950, and by the end of the kerb three months was back at $1,940, a $18 loss from Thursday. Cash/threes was holding a steady backwardation of $32/35.

 

Zinc stocks dropped by 2,500 tonnes, which although expected, helped the market move above $1,070. Some buy stops and fresh buying lifted prices to a peak of $1,073 before values settled back once more. Zincs fundamentals were more upbeat, against a background of recent fund buying and talk of interest by George Soros.

Aluminium went into reverse this morning after a hefty 10,250-tonne stock increase, snapping under $1,420 and triggering some sell-stops. Having conclusively lost touch with $1,450 overhead, a challenge of $1,400 is on the cards.

Last morning trade was at $1,416, down $21 from Thursday, while alloy ended at $1,270, a $20 loss, due to primary metal weakness.

Nickel suffered from disappointed liquidation after losing its grip on $7,300, and was not helped by a 90-tonne stock increase. Trade selling also put the market on the defensive, with final kerb business at $7,215, down $115. Tin trading was slow and prices held close to overnight levels, briefly flirting with $6,000. Last morning business was at $5,995, up just $10.

Lead was featureless throughout the session and concluded at $748.