Base Metal prices ended lower with losses of anywhere between half to one and half percent. Nickel was the top loser as it ended with losses of one and half percent.
Job additions in US though came in higher than in prior two months they came in below expectation. Unemployment rate however declined to 9.4 percent.
Fed Chairman indicated that it might take in three to four years for job market to get back to normal. US equity markets thereby ended lower. However on weekly basis they ended in green thereby taking the winning streak to six weeks.
Japanese markets are closed today while most of the other Asian equity markets are trading lower, though with modest losses.
China’s trade surplus declined to $13.1 billion as stronger import growth surpassed the exports growth indicating strong domestic demand. Dollar index is currently trading modestly in green on the back of weakness in the Euro.
Concerns about peripheral Euro zone nations are re-emerging as they might struggle to raise funds. In the morning session on LME, base metal prices are trading lower with average losses of half a percent.
There are no major economic data releases from US or Euro zone today. Overall, we expect base metal prices to remain on the lower side.
Aluminium
Aluminium prices continues to outperform other base metals as demand is expected to remain on the higher side owing to strong automobile numbers from US, China and India.
Aluminium stocks on London Metal Exchange witnessed draw-down of 2,475 tonnes as against build up of 925 tonnes on the previous day.
On a weekly basis too, stocks declined by 4,650 tonnes and warehouses in China witnessed rise in stocks fell by 1,432 tonnes.
Copper
Copper inventory on London Metal Exchange rose for 17th consecutive trading day as stocks increased by 125 tonnes. Warehouses in China too witnessed increase in stocks by 275 tonnes.
Talks are expected to be held at Cerro Verde copper mine in Peru today to avoid planned workers strike from January 14.
Copper market though continues to remain in backwardation the premium has declined to $18/tonne as against close to $40/tonne on the previous day.
Lead
Lead prices ended with marginal losses as tight supply conditions limited the losses.
Stocks of lead on LME witnessed a decline of 150 tonnes as against rise of 50 tonnes on the previous day. The basis on LME continues to remain in negative (-$26/tonne) indicating tight supply conditions.
Lead mine in Australia owned by Ivernia suspended its operations on the back of government order. The company accounts for roughly 2 percent of world lead production.
Nickel
Nickel prices underperformed most of the other base metals as profit booking seem to have crept in after last year’s outperformance.
Nickel stocks on London Metal Exchange declined by 144 tonnes as against rise of 180 tonnes on the previous day.
Both the basis and cancelled warrant ratio are giving no clear indication of future price movement and thereby it might continue to track other base metals.
Zinc
Zinc stocks on LME declined by a modest 150 tonnes.
Warehouses in China too witnessed increase in stocks for fifth consecutive week. Stocks rose by 5,331 tonnes.
The cancelled warrant ratio, which indicates the material earmarked for delivery declined to 0.24 percent. This is indicating that the stocks of zinc might not witness draw-downs further and in fact might witness an increase. So zinc prices might underperform most of the other base metals.
