MI Comment: Waiting to exhale

Monday was a quiet one by all accounts, with the LME complex holding steady at lower levels after last week's falls. Turbulence in the financial markets had caused dealers to ‘sell everything, ask questions later', though copper improved yesterday on news of continued labour strife in Latin America and of a vessel carrying concentrate bound for India running aground. Aluminium's performance was lacklustre, picking up from 2595 initially to 2620, on 2,000 lots' turnover in the premarket, only to slip back to 2590 over the pm sessions. Nearby linear contangos eased out further as the August prime date passed, while beyond 3-months movement was limited to $0.50/mth here and there, apart from H2 2009 which tightened by $2.00/mth. Activity remained sluggish on Tuesday morning and after easing to 2586 at the start of the premarket prices had picked up to 2607 on low turnover of 1,300 lots, after LME stocks fell for all metals in today's report. With many of the markets' biggest players off to sunnier climes volumes were on the low side, while those left behind nervously listened out for news of further casualties in the wider financial community. Aluminium's own medium/long term trend remained ‘rather flat', wrote Cliff Green Consultancy. The trading strategists looked to probe the short side, in anticipation of a breach eventually of support c. 2540/50, they said. Last at 2605.