Again, it was the ‘minor’ metals of the LME complex that set the pace on Friday with tin, nickel and lead streaking to new (intraday) highs, with the others following to a lesser degree. As we signed off, aluminium had dipped from 2590 to 2560 on rising stocks both in Shanghai and on the LME, though as we went to press it had fully recovered, on small volume. The tone for the rest of the day was set by fresh ‘systematic’ CTA buying interest elsewhere, while stronger oil and gold helped to underpin the metals complex generally. The light metal moved higher over the morning sessions, reaching 2647 by the end of the am kerb. However, a challenge of Monday’s highs c. 2690 was not on the cards, as end of week profit-taking and producer selling capped the rise at 2660 in the afternoon. Values faded up to the pm kerb close, bottoming at 2630 in the aftermarket as dealers headed home after a long LME Week.
Movement on nearby spreads was mixed with linear contangos up to Dec20 lengthening, while Dec20-3m tightened once more to 13.00b (7.50b). Outright producer selling interest saw backwardations to the end of 2008 grow by $1.50-$2.00/mth, though after that spreads were softer, with 2010 easier by up to $1.00/mth.
In Friday’s closing report Cliff Green Consultancy looked for strong resistance c. 2700 to “restrict upward progress”, as they looked for a signal to re-establish shorts, they wrote. With this report signed off over the weekend, we had no update on Monday morning’s action.
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