LME copper closes down; Lead, tin up

With London Metal Exchange copper remaining stuck within its recent price range, analysts said the market is looking for inspiration as the overall picture of the U.S. economy continues to cause concern.

Meanwhile, smaller liquidity markets tin and lead put in strong performances as stock levels dropped and market participants focused on their supply/demand fundamentals.

LME copper is looking lackluster and fails to crack the 200-day moving average of $6,992.96 per metric ton, as the fundamental outlook stacks up against upside price moves.

"The market is losing interest in copper. Technical tightness on aluminium and zinc could still produce some upside. Aluminium was expected to move up ahead of the (December) option expiry, though this seems less likely now," John Kemp, metals analyst at Sempra said.

"The lack of de-linkage is making progress hard for aluminium and zinc. It's hard to see what would provide copper with impetus to keep it from floundering. Weak data on the U.S. housing market continues to weigh," Kemp said.

For the third day in a row, zinc fell despite low stocks levels.

Sales of single-family homes decreased by 3.2% to a seasonally adjusted annual rate of 1.004 million, the Commerce Department said Wednesday, compared to an expected 2.3% decrease.

Meanwhile, three-month lead pushed to a two-week high early in the day and maintained these price levels throughout the session as stock levels dropped Wednesday. Moreover, price support came from positive economic news out of Japan and strong results from mining giant BHP Billington (BHP).

Japanese industrial production rose 1.6% on the month in October, the Ministry of Economy, Trade and Industry said Wednesday, suggesting that the manufacturing sector is on a firm footing.

Meanwhile, BHP Billiton (BHP) said Wednesday that it has a bullish outlook on commodity prices and sees a good future for its key businesses. Moreover, while concerns about the U.S. economy have been growing, BHP Chief Executive Chip Goodyear said the slowdown has been expected and comes at time when China and India are growing strongly and the economies of Japan and Europe are in good shape.

Tin pushed and maintained one-month highs near $10,350 per metric ton.

"Tin continues its robust performance on the back of supply side uncertainties centered around the clampdown of independent smelters on Indonesia' Bangka island," said Barclays.

Nickel maintains recent record high price levels as "the tight nickel inventory situation shows no sign of easing," said Barclays, as well as supply concerns. Nickel stocks fell by 96 metric tons to 6,564 tons Wednesday, according to the LME.

As for currency moves, the U.S. dollar remains severely under pressure against the euro but gained some footing later in the day due to better-than-expected 3Q U.S. GDP data. The U.S. preliminary 3Q GDP was revised to 2.2% from an expected 1.8%.

"A weaker dollar can make dollar denominated base metals cheaper to foreign investors, but a collapsing dollar could mean the value of the metal would depreciate relative to other currencies," Michael Davies of Sucden Research noted in a report.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Tuesday PM kerb

Copper 6910.0-6930.0 Dn 60
Lead 1610.0-1620.0 Up 25
Zinc 4280.0-4290.0 Dn 95
Aluminium 2680.0-2685.0 Dn 24
Nickel 32650.0-32725.0 Dn 400
Tin 10250.0-10300.0 Up 5