Trading on the LME on Thursday began tentatively and while the afternoon proved especially lucrative for copper and nickel, aluminium’s response to stronger-than-expected US economic data was more muted. Chinese industrial production figures for May had given prices a fillip at the opening, with the light metal peaking at 2730. From there values drifted in calm conditions, slipping to 2700 ahead of lunchtime, though a sharp fall in US jobless claims and rise in US producer prices gave all markets a fresh boost. Others performed more strongly, though aluminium picked up rapidly to 2754 in the afternoon, before fading again to 2720 in the aftermarket.
The C-3m spread lost a weekend’s worth of contango and was unchanged elsewhere, while forward rates were $2.00-$2.50/mth easier in H1 2011, with only minimal movement elsewhere.
On Friday morning activity had slowed right down with prices hovering between 2716-2735 on poor turnover so far of only 550 lots. Having found technical support c. 2660, Cliff Green Consultancy were now looking for possible tests of 2760/70 and ‘even’ the 2830 area, they wrote. However, further bounces were expected to be restricted by “a wealth of overhead resistance”, they added.
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