Copper and zinc were the LME's shining stars on Monday, though aluminium never made it out of the starting blocks. After kicking off at 2766 and trading to a high of 2777 a low level of interest took its toll, with the light metal never looking like following the others towards last week's highs. Volumes were dire as prices then slipped over the morning sessions towards 2750, where the 100-day moving average generated some two-way business, though it hit stops as it traded through it. Friday's positive US existing homes sales data for February had heightened hopes for yesterday's new home sales report, though the figures were much poorer than expected. In tandem the markets pulled sharply lower, with aluminium bottoming at 2717, and while copper sprung back in late trading, the light metal remained pinned near the lows.
The only bit of backwardation to remain within C-3m was Apr18-27, at 3.00b from 6.00b, with the rest of the structure easing throughout. Forward rates were cut too, on the whole, with the biggest faller being Nov-Dec'07, from 17.00b to 13.00b, though most else came in by $1.00-$2.00/mth. The exception was H2 2008, which tightened by $1.00-$1.50/mth. No update on the LME's WC warrant banding report was available at time of writing.
Cliff Green Consultancy had suggested in their daily report that aluminium's nearest technical support lay around 2720 and on Tuesday morning prices had held there currently. Volumes were double those of yesterday at time of writing with prices perking up from a low of 2722 to 2740. A strong €/$ was aiding the effort, though activity across the metals spectrum was rather flat. Below 2710, CGC now expected 2660/70 to come under examination in the days ahead, with a clear break below there signalling falls towards 2610, then 2550. Yikes!
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