London Metal Exchange (LME) lead prices were set for a jittery day's trading yesterday, said traders, while the rest of the base metals were likely to be range-bound as copper and aluminium did little in pre-market trading.
Lead prices nudged up to $560 in the pre-market as the anticipated stock drawdown, which fuelled prices yesterday, took place.
"There was a mark up in the lead price after the stocks were announced but we tried to sell at $558 and could not," said one dealer. Around 2,575 tonne were withdrawn taking stocks below the 100,000 tonne mark. Last time stocks were at this level prices rallied.
"The price is worthy of a sale but people are nervous because of the backwardation. It is a nasty one because it's not nearby but all in the last month of the spread," said a dealer.
The awkward situation experienced in the lead market would not be helped by copper, said traders.
Copper is expected to trend lower and although it was up $9 on last night at $1,776, nobody was getting excited about its short-term prospects.
"Bearish developments suggest that prices could fall to the 30-day moving average at $1,730 and a failure to hold that level would seriously call into question the sustainability of the current uptrend," Robin Bhar of brokers Brandeis said.
Aluminium slipped under yesterday's close at $1,463, but its crab-like moves are expected to continue today.
There is no incentive for an upside move, said dealers but likewise no appetite to break lower, they added.
Zinc saw yet another drawdown of stocks of 1,675 tonne and prices moved up $4 to $1,073 at 1040 GMT. Dealers said the market was getting conflicting signals as the moving averages kept criss-crossing each other.
"It is stuck in a $1,060/80 range. As soon as it gets to $1,080 it runs out of steam," said a dealer.
Meanwhile, nickel held above $5,500 in the pre-market which was interpreted as bullish for the days' trading.
Tin was up $60 at $5,460 and alloy was marked down at $1,308/18.
