London 29/07/2011 - Base metals prices opted for narrow-range trading at mixed price levels during the Friday LME pre-market session, with the earlier advances in Asia relinquished as caution and uncertainty again took hold, traders said. "Most people want to stand back if they can, as we have this debt issue [in the US and Europe]. Copper should go higher because of the [Escondida] strike but it is getting sold into in the high $9,800s," a trader said. Copper traded as high as $9,895 per tonne in Asia, its highest since April 11, before falling back to swing around the $9,800 level. Wariness in the wider financial arena over global debt remains a restraint, with the overall air of caution and uncertainty keeping the complex in defensive mode. A largely unsurprising daily inventory report also did little to excite the complex ahead of the end of the week and the month. "The metals have generally held up well but they seem to have run into resistance now and are under pressure," William Adams of FastMarkets said. Although there are pressing supply-side issues in copper, and nickel and tin are still close to this week's two-and-a-half months, the upside for the metals complex is increasingly being blocked by wider macroeconomic negatives. The deadline for the US to raise its debt ceiling is getting nearer - the country could face default on its sovereign debt if the $14.3 trillion ceiling is not lifted by August 2. The dollar was steadier at around 1.4285 against the euro. As well, eurozone debt contagion worries are ever-present and the slowest month of the year for physical activity is imminent. "Should the markets start to get more concerned about the debt situation or the economic outlook - and if that prompts a correction in equities - we would not be surprised if the weakness flows through into the metals," Adams said. Metal prices, seen ranging routinely for now, are likely to be more susceptible to volatility in the latter half of the session on booksquaring activity. There are also a string of US economic releases to round off what has been a largely soft week for North American data. Figures due include the second-quarter advance GDP growth rate, advance GDP price index and employment cost index as well as the July Chicago PMI and revised UoM Consumer Sentiment index. COPPER AND ALUMINIUM INVENTORIES FALL Copper was recently at $9,799, a $16 loss from Friday's kerb. Warehouse inventories fell 1,800 tonnes to 406,550 tonnes but cancelled warrant tonnage - metal booked for removal - dropped 9.3 percent to 14,625 tonnes, the lowest since May 11. The supply focus remains the continued strike at Chile's Escondida mine, part-owned by BHP Billiton, which is eight days old today. The mine operator has declared force majeure on concentrate shipments. Aluminium was $12 lower at $2,626, with the market having lost upside momentum since mid-week. Inventory movements reverted to their usual trend after Thursday's near-100,000-tonne increase, with stocks falling 8,175 tonnes to 4,453,250 tonnes. Zinc traded at $2,498, a $21 loss. Stocks fell 500 tonnes to 889,550 tonnes but cancelled warrants soared a hefty 7.3 percent to 113,850 tonnes, the highest level since April 2006. Of these, 28 percent or 82,075 tonnes are in New Orleans, having risen from 7,750 tonnes on July 15. Since that date, total zinc cancelled warrant tonnage has climbed from 38,900 tonnes but the increase is not a reflection of consumption: rather it is intra-location shifts in the latest 'warehouse wars'. Nickel equalled the previous day's $24,700 two-and-a-half month best and then drifted to $24,629, up $79 - stocks fell 390 tonnes to 102,450 tonnes. Lead fell $5 to $2,650, while there was a 475-tonne inventory decline. Tin traded at $28,520, a slight $20 advance - inventories rose 125 tonnes to 20,865 tonnes. Steel billet was quoted at $585/600, with business having dried up in recent days. Inventories rose 1,040 tonnes - all in Detroit - to 39,910 tonnes. Cancelled warrant tonnage, however, climbed to 5,720 tonnes due to a 4,355-tonne cancellation in Johor. In the minors, cobalt was indicated at $34,500/35,750 and molybdenum at $30,500/36,500.

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