Lme Copper Slides On Higher Stocks

LME copper crept lower on Friday morning after inventories rose further, but activity was low-key ahead of a long weekend in Britain. Aluminium was also easier, and could be vulnerable after failing on the upside on Thursday, traders said.

No immediate effect was felt in metals after Britain's Labour Party won a landslide victory after 18 years of Conservative rule, they added. Three months copper probed nearby $2,350 support after LME stocks increased by 2,175 tonnes. It was last down $12 at $2,348 per tonne.

A large chunk of metal, 950 tonnes, arrived in the LME Long Beach warehouse. Analysts have been expecting metal from Comex to show up in US. LME warehouses attracted by the backwardation. Contrary to some expectations, no material left the Singapore facility unlike Thursday when 2,150 tonnes were delivered out.

 

3-months market was seen banking on spread trading which is volatile since backwardation collapsed on Monday.

The cash/threes backwardation was little different at $70/$75.

Support was pegged at $2,320 and $2,300 while resistance was seen at $2,380 and $2,400.

Aluminium also eased despite another stocks fall of 2,200 tonnes which brings the week's total draw to 11,975 tonnes. Prices were $5 softer at $1,623 and traders saw scope for more weakness. "It looks a bit vulnerable. Yesterday was disappointing to bulls, and ahead of the weekend we could see liquidation," a trader said. First support was pegged at $1,620 with resistance just above Thursday's peak of $1,647.

Most of the other metals were weak and could see jerky movements in what was expected to be a rather illiquid market, traders said.

Lead dipped $5 to $621 and was in danger of moving back below its downtrend line from early April. Prices touched an 18-month low of $615 on Tuesday.

Tin was indicated at $5,685/700, down from $5,710, after holding to a narrow range on Thursday. Some analysts thought more consolidation was likely, while others regarded the damaged charts as pointing to an eventual test of the recent low of $5,600.

Zinc dipped $9 to $1,260 and sideways activity was expected.

Nickel was indicated at $7,290/310, down from $7,350, while alloy was slightly softer at $1490/500 versus $1,505.