London Metal Exchange prices pared early record gains after U.S. data on industrial production fell short of expectations and renewed concerns for a U.S. economic slowdown, traders and analysts said Tuesday.
LME nickel, lead and zinc hit record highs, extending their rally on tight fundamentals and potential supply disruptions, traders said.
LME three-month zinc moved to a record $4,020/metric ton on the back of tight fundamentals and speculative buying following an earthquake in Potosi, Bolivia, close to silver-zinc operations.
In the nickel market, French producer Eramet SA has just one week of nickel ore in stock at its operations in New Caledonia due to a blockade by workers at two of its mines, the company said. "We have one week of nickel in stock and two of the mines are still blockaded," spokesman Olivier la Besse said.
Prices reached a record $32,050/ton, up $250 on the Monday PM kerb.
LME three-month copper rallied to a six-week high of $7,872.50/ton in early trade, up 1.3% on the Monday PM kerb.
News of a 52,000-ton production cut at Mitsubishi Materials Corp.'s Indonesian smelter due to a problem at the smelter's oxygen facility boosted prices, as well as a 5,000-ton LME stock net drawdown to 109,600 tons.
LME tin, a star performer the past three days with 20% gains to an $11,000/ton record high, declined sharply on profit-taking and perception that supply concerns in Indonesia and Bolivia were overdone, UBS analyst Robin Bhar
said.
Prices fell to $9,850/ton, down 10% in the afternoon as selling pressure for other LME metals gathered pace following the weaker U.S. industrial production numbers, which at a decline of 0.6% were below consensus of unchanged.
"This is the second time IP numbers came in lower than expected, pouring cold water onto metals," analyst Edward Meir at Man Financial said.
LME aluminium resisted selling pressure elsewhere on the board until just before the kerb, with prices only slightly down on the day.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb
Copper 7639.00-7640.00 Dn 129.00
Lead 1495.00-1500.00 Dn 35.00
Zinc 3865.00-3870.00 Dn 95.00
Aluminium 2673.00-2675.00 Dn 4.00
Nickel 31350.00-31400.00 Dn 450.00
Tin 9975.00-10000.00 Dn 975.00
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