London Metal Exchange nickel jumped to a new record high Wednesday amid low supplies and generally positive sentiment across the base metals, but traders will continue to cast a wary eye on further developments with the equity markets, analysts said.
"Recent metals price weakness illustrates that despite firming fundamental indicators, the sector remains extremely vulnerable to deteriorating economic sentiment," Barclays Capital said in its daily note.
Late Wednesday, U.S. stocks were sharply lower following falls in European and Asian equities. On Tuesday, the Dow Jones Industrial Average posted its second-biggest points drop in four years as problems with subprime lenders grew.
Fund selling early Wednesday emerged following the sell-off in Asian equities but by midday had regained ground on trade support and short-covering, said traders.
Three-month nickel pushed to a record high of $45,000 a metric ton before retreating to a PM kerb of $44,800/ton.
Nickel benefited from the positive sentiment seen across the base metals complex Wednesday, an LME trader said earlier. And a drawdown in LME nickel stocks highlights an already tight supply situation, adding to price support, he added.
LME nickel stocks fell 60 tons to 3,816 tons Wednesday. And with canceled warrants – or material accounted for and to be drawn down at a later date – at 36% of global LME nickel stocks, available inventories comprise less than one day's worth of nickel consumption.
Meanwhile, three-month lead inched towards it's recent record high of $1,955/ton by pushing to a session high of $1,890/ton before retreating to a PM kerb of $1,870/ton.
Ongoing supply concerns in Australia add to an already tight market.
Lead shipments at the Magellan mine in western Australia have been suspended on concerns that about 4,000 birds in the region have died of lead poisoning, with an investigation expected to take weeks.
The suspension also follows on from Xstrata PLC declaring force majeure on lead deliveries at its Northfleet refinery in the U.K. due to falling lead grades at the Mount Isa mine in Australia.
At the same time, total LME lead stocks are down over 20% since the start of the year.
In other metals, copper and aluminium traded modestly lower by late Wednesday.
Copper has traded in a range between $6,120 and $6,330/ton for the past several sessions as concerns over global risk aversion caps gains from strong supply/demand fundamentals.
Uncertainty is keeping some investors on the sidelines, London-based commodities analyst Michael Widmer of Calyon said. "It's a tricky situation at the moment and I expect copper to remain rangebound unless there is a major breakout in the outside markets."
LME copper stocks fell 1,975 tons to 197,750 tons Wednesday and are down 8% from a month ago.
Prices in dollars/ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 6220.0-6230.0 Unch
Lead 1870.0-1880.0 Up 25
Zinc 3210.0-3220.0 Dn 10
Aluminium 2714.0-2715.0 Dn 23
Nickel 44800.0-44900.0 Up 1225
Tin 13500.0-13525.0
豫公网安备41010502003434号