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Much better than expected US economic data saw the base metals recover strongly during Monday afternoon, however the
recovery ran out of momentum and quickly stalled. Overall the base metals complex is looking rather tired and heavy, with a stronger dollar this morning helping put the base metals back under pressure heading into Tuesday afternoon.
With US September Factory Orders the only economic data of note this afternoon, it seems likely the metals will look to the
currency and equity markets for short term direction. Overall however, the market still remains focused on the various central
bank rate announcements tomorrow and Thursday.
Copper finished Monday relatively strongly, closing just over 1% higher at $6,560. The metal failed to consolidate its position however, and, after again climbing initially during Asian trade, has since come under pressure from a stronger dollar, trading back below $6,400. Also weighing on prices has been a net 1,500 mt increase in on-warrant stocks, the main location for the increase being various US warehouses.
Volumes remain pretty healthy however with the price weakness seemingly attracting some sporadic buying interest. Elsewhere, the other base metals are again looking to copper and the dollar for direction. Volumes have picked up a little, but remain subdued overall.
In other news, the Peruvian government has announced that Doe Run will have to provide $100 million in financial guarantees in order to restart its La Oroya lead and zinc smelting complex. The smelter has been closed since June.
Courtesy: Commodities Research, Standard Bank
