LME MORNING - Base metals steady, high expectations for FOMC meeting

London 12/12/2012 - Base metals were back in positive territory in Wednesday's premarket, helped by a steadier euro - last at 1.3017 against the dollar - and expectations of further economy-boosting monetary measures in the US. “Metals are steady with a slightly stronger euro, moderately positive economic data and the prospect of continued stimulus by the US Fed,” a trader said. "Technically, the chart picture suggests the path of least resistance is to the upside." Over the past couple of days, there has been growing speculation that the FOMC could roll out a fresh bond-buying effort of $40-45 billion per month that will replace "Operation Twist", which is set to expire at the end of the year. “Clearly, any news which does not meet expectations can stop an upward move in its tracks,” he added. There has also been optimism that US lawmakers will come to an agreement that will avoid the fiscal cliff - a round of automatic growth-negative tax and spending measures. But both the White House and Republicans in the House of Representatives have dug in their heels on the issue of tax increases for the wealthiest Americans. On the data side, releases scheduled for Wednesday include November PMI data for France and Germany, and, in the afternoon, November US import prices and the November US federal budget balance. The Fed statement is due after the LME closes. ALL METALS STRONGER Copper was last at $8,138 per tonne, up $35 on the previous day’s close, despite a jump in inventories of 7,475 tonnes to 269,200 tonnes - the highest since March 14. The increase was due to a 5,175-tonne rise in New Orleans and a 2,900-tonne increase in Busan. Cancelled warrants were down 600 tonnes at 28,125 tonnes. Aluminium at $2,132 was up $16. Stocks were down for the third consecutive day, falling a net 9,650 tonnes to 5,167,650 tonnes, while cancelled warrants at 1,686,675 tonnes were down 11,675 tonnes. Nickel peaked at its highest since October 10 of $17,899 before settling at $17,876, still up $76 on yesterday’s close. Stocks were 150 tonnes higher to 137,622, with a 714-tonne increase in Johor offset by decreases in Dubai and Rotterdam. Cancelled warrants were down 828 tonnes at 14,538 tonnes. Lead at $2,301.75was up $3.75. Stocks were down 1,975 tonnes at 350,925 tonnes and cancelled warrants at 160,050 tonnes were down 1,725 tonnes. Sister metal zinc was $9 higher at $2,089 after stocks fell 3,200 tonnes to 1,225,700 tonnes. Ti n business is also higher - it was last at $23,030, an increase of $60, even after a 190-tonne increase in stocks to 11,595 tonnes due to arrivals in Port Klang and Singapore. Steel was indicated at a soft $325/345 after stocks and cancelled warrants both fell 1,950 tonnes to 57,850 tonnes and 9,490 tonnes respectively. Cobalt was indicated at $23,000/29,000 and molybdenum was offered at $26,500.

Courtesy: FastMarketLtd

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