This week the prices are relatively steady as the falling exchange rate offsets the weakening LME prices. Last night the LME aluminium closed at USD1760 its lowest level since 26 September despite strong economic data out of China.
Also during the week the LME announced reforms to its warehouse queues with a threshold of reducing delays to load out material to 50 calendar days. It is hopeful that if these queues are reduced the LME can start reflecting the true market levels. As an example LME Steel billet currently trades at USD225 which is well below the price true spot deliveries are being transacted at.
**** DJ LME Copper Treads Water Ahead of China Policy News ****
By Francesca Freeman
LONDON–Copper prices were steady at the close of London Metal Exchange floor trading Monday as investors awaited policy signals from top metals consumer China.
Copper found some support after data from China over the weekend provided further evidence of a steady economic recovery. While industrial production grew by 10.3% year over year in October, consumer inflation rose to 3.2%, the highest reading since February.
Copper prices are sensitive to economic growth indicators due to their wide use in construction and manufacturing.
Trade remained cautious pending the outcome of a major policy meeting in Beijing. The Communist Party’s Third Plenum, due to end Tuesday, is expected to address economic reform. “At the moment, the market is adopting a cautious tone ahead of China’s Third Party Plenum,” results, said Deutsche Bank analysts.