Volumes traded over the morning were low however, indicating a lack of liquidity across the exchange. Some 1,386 lots of zinc have traded so far, behind close to 3,000 lots traded in copper, aluminium and nickel futures respectively.
Continuing momentum gained at Monday’s close, zinc’s outright price has climbed by just under 3% from an intra-day low of $2,230.50 per tonne to trade at a high of $2,298.50 per tonne this morning.
Forward spreads in LME zinc also remain supportive, with the metal’s benchmark cash/three-month spread recently trading in a contango of $8.75 per tonne, supporting near-term business and carry costs.
“Chinese credit data raises the specter of a sharper slowdown in the Chinese economy - it being the second lowest amount in 2019. That the metal markets and particularly copper did not react more negatively [on Monday] says much about positioning with shorts already established,” Marex Spectron’s LME analyst Alastair Munro said in a morning note.
“[Tuesday] sees the last day of the official index roll out of September with most metals, bar nickel, having seen the front end of the curves ease over the past few sessions,” he added.
Elsewhere in the complex, lead’s three-month price was the laggard over the morning, trading marginally lower against Monday’s closing price of $2,065 per tonne.
Despite recent news of a shutdown at Nyrstar’s Port Pirie lead smelter in Australia, a subsequent uptick in the metal’s three-month price has since stemmed. Similarly, an outflow of some 900 tonnes out of LME-registered warehouses in Antwerp also failed to push the metal’s price higher.
That said, lead’s three-month price has rallied by more than 6% from a low of $1,932 per tonne on August 2, breaching the $2,100-per-tonne level on Monday for the first time since March.
- The dollar index was up by 0.14% at 97.55.
- In other commodities, Brent crude oil futures were also higher over the morning, up by 0.67% at $58.74 per barrel.
- In European data this morning, the United Kingdom’s July-August average earnings index on a three-month moving average compared with the same period a year earlier was in line with expectations with a rise of 3.7%, while the country’s claimant count change over July-August fell to 28,000, from 31,400 previously.
- In addition, the UK’s unemployment rate over the same period edged slightly higher to 3.9%, from 3.8% previously.
- Later, a basket of US data including the Consumer Price Index (CPI), core CPI, and the National Federation of Independent Business (NFIB) small business index are of note.