LONDON (Commodity Online): After a rather mixed day yesterday, the return of the Asian market this morning has given the base metals complex some fresh impetus, while a weaker dollar has also lent support. The strength has seen sporadic bouts of short covering activity across much of the complex and stops being triggered, helping all of the metals to post strong gains heading into the afternoon.

Data-wise there was no change from the BoE - as expected - which kept rates unchanged at 0.50%. The Asset Purchase Target was also unchanged at £175 billion. The focus is now going to be on the November meeting as the end of the current quantitative easing program will combine with the latest inflation report. The ECB also left rates unchanged at 1.00%, in-line with expectations.

This afternoon sees the release of the US initial and continuing jobless claims, expected at 540K and 6105K respectively. Nickel was the best performer on Wednesday, as short covering and fresh buying interest saw it finish the day 2.6% higher. Prices have since continued to rally this morning, with the metal climbing back above $19,000.

In contrast, copper had a fairly sluggish day yesterday, trading sideways, albeit seeing good turnover. This morning has seen copper spark back to life however, trading back above $6,300 on the back of fresh Asian buying and after stops were triggered. Of note, workers at BHP Billiton’s Spence mine agreed to delay industrial action and continue talks over the weekend.

The date for a potential strike to commence is now October 13th. The news initially helped offset reports of a mechanical failure at BHP Billiton's Olympic Dam operation (see yesterday’s report), however the Olympic Dam story does now appear to be boosting sentiment. An investigation into the incident is still ongoing, however, for the moment, the mine haulage system is only operating at 20%, reducing the flow of material to the concentrator. The mine produced 194 kt of copper in the 12 months to June 30th.

Zinc has also rallied strongly this morning with the metal tracking copper higher. The closure of Minmetal’s Century zinc operation, following a leak in the pipeline transporting concentrate from the mine is continuing to lend support to prices, though we note that the severity of the stoppage will likely be shown in the spot concentrate market first.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook