Lme Copper Prices Dip Despite Stock Fall

Base metal prices veered lower during Wednesday in LME ring and kerb trading as early steadiness faded in the face of a pressured copper market, traders said.

Copper was again unable to sustain an early rally towards $2,500, and failure here was the signal for further speculative liquidation throughout the rings. Softer trends in spread backwardations and little excitement during June option declarations late-morning contributed to the dull tone, they said. In the short-term, the market is deriving little support from inventory movements. This week's drawdowns have been modest as physical interest dwindles ahead of the third quarter. The Inco Sudbury strike is not influencing the market at present.

 

Copper's woes were underlined by softer New York values, and persistent commission house sales took the market under $2,470/75 support triggering some sell-stops. By the end of the kerb, three months was back at $2,462 per tonne, a $17 loss from Tuesday's kerb close. Cash/threes was straddling $50 backwardation.

Elsewhere, aluminium was relatively stable with some technical support helping to hold the line at $1,580. However, this market looks destined to head lower as well, with charts bearish under $1,600, and amply physical availability despite falling stocks. Aluminium closed the morning at $1,583, against Tuesday's close of $1,578.

Nickel was less volatile with the market attempting to find a level after the whip-saw movements earlier this week. Prices still eased back but traders remain cautious over the Inco strike, and whether a sustained stoppage will impact on supply. Final morning trade was at $7,090, a $90 loss from yesterday.

Trade buying was again evident on zinc with the market able to hold above $1,330 although there were few signs of prices pushing higher. Last trade was at $1,330, down $4.

Tin's mini-rally of Tuesday was not sustained today with the market wary of recent talk of Russian stockpile shipments to the West. Last business was $100 softer at $5,580.

Lead drifted lower and closed at $622, down $4. The quiet alloy market was stable at $1,475/80.