Base metals finished firmer on the London Metal Exchange (LME) on Friday buoyed by upbeat industrial output data from the United States, however business was thin and the longer term direction was unclear, traders and analysts said.
"There are so many variables in the market at the moment - oil prices, equities and China - that it's hard to pick a direction," one LME trader said.
Another trader said he expected to see continued sideways volatility until trends in other markets were defined.
"Fundamentals are not too bad, but there are some technical selling indicators. These are difficult markets," he added.
US industrial output rose 0.8 percent in April versus analyst forecasts for 0.3 percent.
Tin rose $60 to $8,760 a tonne by the kerb close, while the cash to three months spread hit $600 backwardation, the highest since the re-introduction of the contract in 1989.
"The backwardation in tin is amazing. For some reason it hasn't come in yet. There don't seem to be any deliveries out there at the moment, but when they arrive we should see things ease," Man Financial analyst Edward Meir said.
"Fundamentally tin looks strong and technically we are seeing a pennant formation, which is also bullish."
Meir said he expected tin to hit $10,000 a tonne.
"Tin is the strongest of the complex and it has some way to go on the upside," the second trader said.
"The tin backwardation has been bid out, but not necessarily traded," he added.
Tin stocks fell to 3,865 tonnes overnight, the lowest level since 1989,
Copper closed at $2,592, up from $2,581, having moved as high as $2,620 on rumours that Freeport-McMoRan Inc's Indonesian Grasberg copper and gold mine, the world's third largest copper mine, had experienced supply disruptions.
Freeport denied any supply disruptions but said that work at the pit had been suspended briefly on May 11 for safety reasons after heavy rain.
"I saw copper blip up to $2,620 around midday on the Grasberg rumours and the US industrial production number was also constructive," Meir said.
"Prices have moved in a bit of a range but on very flimsy volumes. Industrial output numbers prompted a briefing flurry but prices are all drifting back now," the first trader said,
Nickel closed $100 higher at $10,825.
"Nickel seems to be attracting consumers between $10,500 and $10,800," the second trader said, but he added that stock levels, which have settled around 14,000 tonnes since mid February would need to resume their earlier downtrend in order to provoke a push higher.
Aluminium closed $23 higher at $1,615, while zinc was up $3 at $1,020.
Lead ended higher at $734 versus $726 at Thursday's close.
Comments
Comments are closed.