London 04/01/2016 - Base metals ended the first of day of the year in negative territory on the LME - a rout in Chinese equities spread to the rest of the world, which weighed on the complex.
The Shenzhen Composite and the Shanghai Composite fell 8.2 percent and 6.86 percent respectively today - trading on both exchanges was suspended after the authorities implemented a circuit breaker for the first time.
This followed disappointing data from the country - December's Caixin manufacturing PMI at 48.2 missed the forecast of 48.9 and was below November's 48.6. This was the 10th straight month in which the figure was below 50, which signifies contraction.
"It may be the start of a new year but the market is the same as it was last year - not looking good," a trader said.
"The Chinese PMIs are not really a reason for it to come off the way it - they have been below 50 for months," he added. "Rather, it looks like the Chinese stock market spooked people so [there was] a bit of de-risking into the safe-havens like gold."
In other data today, the EU manufacturing PMI was as expected at 53.2 - the Italian, French and German manufacturing numbers were all close to expectations.
From the US, the final manufacturing PMI came in as expected at 51.2, while the ISM manufacturing PMI, construction spending and ISM manufacturing prices all undershot.
In the metals, copper concluded at $4,606.50 per tonne, down $98.50 on its end-of-year close, having earlier fallen to the softest since December 18 at $4,591.50. Business on Select was robust - more than 18,000 lots changed hands by the kerb close.
"Despite the [volumes,] business has been disappointing - there are fund rolls to come but the rebalancing is very much factored in and in place," another trader said.
The reappearance of a backwardation was largely ignored - cash/threes was last at $3 while Jan/3-mth was at $8.25. In stock moves, inventories fell a net 425 tonnes to 235,800 tonnes while cancelled warrants fell 2,100 tonnes to 38,200 tonnes.
Aluminium ended at $1,473, a loss of $34 and around its lowest since December 18. Stocks and cancelled warrants both dropped 5,975 tonnes to 2,889,550 tonnes and 1,073,275 tonnes respectively.
Tightness in the cash/Jan date has eased - it was last at a contango of $5 - but the February dates are backwardated.
Lead concluded at $1,745.50, down $47.50; stocks were unchanged. Its cash/threes spread was last at a contango of $3.25 having been backwardated earlier today.
Zinc fell $41 to end at $1,568 - stocks and cancelled warrants both fell 1,700 tonnes to 462,700 tonnes and 59,375 tonnes respectively.
Nickel concluded $315 lower at $8,505 after stocks increased 48 tonnes to 441,342 tonnes. Tin at $14,400 was down $155; stocks were unchanged but cancelled warrants increased 75 tonnes to 515 tonnes.
Steel was last indicated at $185/235 and cobalt and molybdenum at $23,500/24,000 and $11,500/12,000 respectively.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)