Lme Starts Off On A Quiet Note, Copper Eases

London Metal Exchange (LME) base metals started the week with a whimper on Monday morning, with copper edging lower after a smaller than expected stocks drop.

It is just desperately quiet, a trader said. Copper has barely moved at all. The (475-tonne) stocks drop was probably less than expected but it doesn't seem to have made too much of a difference. Three months copper traded as high as $2,287 in early inter-office trading, down $1 from Friday's kerb close, but later prices edged down to $2,283. A strike by a union at Chile's massive Escondida copper mine was under the market's close scrutiny, although its effect on the price so far was minimal. The market is going to watch it although the view is that the union is too small to affect production, a trader said. But that may be a factor in some of the tightness developing in May.Cash/threes backwardation was at $48/$53, after flaring some $10 on Friday to $45/$50 by the kerb close. Cash to May had moved from $2 contango to $12 backwardation, which was helping to underpin the price.

 

In other metals, aluminium was quoted $2 higher at $1,556 after a stocks decline of 2,975 tonnes. Traders were watching for IPAI production data

due out at 1000 GMT.

Traders noted some interest in zinc in the pre-market, largely attributed to commission house short covering. But prices were last $1 down at $1,246, following a small 225-tonne rise in LME inventories. Lead, which had a weak close on Friday, came under light pressure from Far Eastern selling and was last indicated at $628/$630.

Platinum higher: Platinum and palladium prices moved higher on Monday amid concerns Russian supplies might be further delayed, but dealers said the market was beginning to look slightly top-heavy. "Platinum is the flavour of the day again while there is a squeeze in place on the liquidity," said one London dealer.

"Hopefully we won't see the lows again (in platinum) but I think perhaps we are a bit...high," he added.

Gold followed platinum initially, but momentum quickly stalled and prices fell back to below $342.00 an ounce. Bullion was fixed barely changed at $342.15 from $342.10 on Friday. Prices did not react early to news from Tokyo that Russian central bank officials may be visiting this week to discuss issuing gold-backed bonds. But a dealer said, "If you securitise gold it's partly bullish because it can't be sold." The forward platinum market remained tight, with one-month lease rates hovering around 10 percent, dealers said. Borrowing interest was clustered in short periods.