LME base metals consolidate; nickel down

London Metal Exchange base metals consolidated gains in mixed trade Tuesday as market participants looked for fresh direction in the summer lull. The day was quiet in terms of potential external market factors, with spot gold capped on the upside and crude oil falling. In other external factors that could affect base metals, the dollar hit a fresh record low against the euro at $1.3852, which traders said should provide some lift to base metals sentiment. LME nickel was the biggest loser, giving back 3.5% to bring this week's slide to almost 10%. The fall was triggered by a hefty 804-metric-ton build in LME inventories, analysts said. LME nickel stocks have built up by some 45% in the past fortnight to around $12,600 tons. However, signs that Chinese producers are cutting production of nickel pig iron – a lower-nickel content substitution for some grades of stainless steel – may stem losses, said David Thurtell of BNP Paribas. Instead, LME zinc is favorite this week he added, as funds capitalize on falling LME stocks and a global market close to balance. The global market for refined zinc was in a small 9,000-ton surplus for the first half of the year, according to the International Lead and Zinc Study Group data last week. Zinc stocks continue to move to multi-year lows, now approaching 65,000 tons. LME lead will need to close above $3,500 a ton to keep the recent momentum going, said a London-based trader. However, the market is nervous about an expected $500/ton correction down, he added. LME copper eased as strike news buoying the complex over the last few months begins to wind down. Chilean copper giant Corporacion Nacional del Cobre, or Codelco, will resume negotiations with striking contract workers represented by the Federation of Copper Workers, a union leader said Tuesday. Monday, Codelco signed a bonus-and-benefits deal with non-striking unions representing about half of the company's 28,000 contract workers. Prices in dollar a metric ton. 3 Months Metal Bid-Ask Change from Monday PM kerb Copper 7955.0-7960.0 Dn 65.0 Lead 3380.0-3385.0 Dn 10.0 Zinc 3725.0-3730.0 Up 35.0 Aluminium 2825.0-2828.0 Up 1.0 Nickel 32200.0-32250.0 Dn 1200.0 Tin 15350.0-15360.0 Up 25.0