Lme Copper Quiet On Market Volatility

I think there's a lot of uncertainty, with the potential for swings of $30 one way or the other, so people are standing aside, one said. Three months copper climbed to around $2,037 per tonne but quickly drifted back to be indicated at $2,026/30 at 0845 GMT, after Wednesday's kerb close of $2,020. Spreads held at tighter levels, with cash/threes quoted at $17/$20, barely changed from Wednesday.

Yesterday's cash/threes spread compares to a $60 backwardation last Friday when copper broke through $2,000. Many traders and analysts believe that any tightness that had been expected ahead of key Sept dates in the wake of the Sumitomo-led sell-off three months earlier has been seen.

 

The market was for the time being locked within a new range of $2,000-$2,070, with $1,970 a solid barrier below. The other metals were also little changed in thin activity.

Aluminium was indicated at $1,509/11 versus a kerb close of $1,508, and seen hemmed in by a $1,500-$1,520 range. The market was watching the 10-day moving average, which may soon make a bullish cross upside, broker Brandeis said in a commentary.

Zinc had crept higher, indicated at $1,041/43 after a kerb close of $1,038. The market was probing nearby resistance at $1,041 and was giving a positive chart signals after a close above the 10-day moving average, Brandeis added. Next resistance was at $1,046.

Nickel was little changed at $7,540/50 after a close of $7,550 but the market is seen well supported due to labour talks at Inco's Thompson facilities in Canada. Workers have voted to strike if an agreement cannot be reached before the present three-year contract expires on September 15.

Although the fundamentals still look bearish, if there is strike action at Inco, then prices may rally further in the short term and this could trigger trade short-covering, said William Adams, analyst at broker Rudolf Wolff.

Chartists pegged resistance at $7,660, support at $7,490.

Tin was unchanged at $6,250/60 and lead was also basically flat at $815/17.