London 05/01/2016 - Base metals were unable to sustain early upside probes during late-Tuesday LME trading, with contracts drifting back to mixed finishes amid a lack of enthusiasm, traders said.
"It has been a better day for prices but that's only because the market has got back what it lost on Monday - China has helped today," a floor trader said.
First, China's equities recovered. On Monday, the Shenzhen Composite and the Shanghai Composite fell 8.2 percent and 6.86 percent respectively but today the Shanghai Composite Index dropped 3.1 percent in early trading before recovering to close just 0.26 percent lower.
Prices were also lifted by news that China's State Reserve Bureau is looking to buy 150,000 tonnes of copper through a tender that is expected to take place this week.
"But you can't help feeling that there will be no real change this quarter from last quarter 2015 - the markets are still either bumping along the bottom or trying to find the bottom," the trader added.
The outlook remains bearish given concerns about slowing Chinese growth, the ailing manufacturing sector and demand prospects in the near term.
"We are still in the early days of the month but we have the [fund] rolls to come next week and the rebalancing, where copper, nickel and zinc will be bought, starting. A lot of that might already be positioned in, though," another trader said.
In the metals, copper slowed as it neared $4,700, slipping back to range around $4,650 and ending at $4,645 per tonne, up $38.50 on Monday's close, when prices touched a two-week low of $4,591.50.
In today's warehouse data, copper stocks fell a net 575 tonnes to 235,225 tonnes, while cancelled warrants climbed 675 tonnes to 38,875 tonnes.
Aluminium was under technical pressure below $1,500 and gradually drifted to hit one-month lows near the close, ending at $1,463.50, a $9.50 loss. Earlier, stocks and cancelled warrants were unchanged.
Nickel climbed $90 to $8,595. Stocks rose 168 tonnes to 441,510 tonnes while cancelled warrants were up 1,686 tonnes at 162,966 tonnes.
Zinc ranged routinely and finished at $1,573, up $5. Stocks fell 2,225 tonnes to 460,475 tonnes, the lowest since mid-August.
Lead reversed direction after initial advances and closed at $1,714, a $31.50 loss and around the lowest for two weeks. Warehouse stocks and cancelled warrants both fell 750 tonnes to 190,900 tonnes and 110,300 tonnes respectively.
Tin was in negative territory throughout, closing at $14,155, down $245 and near six-week lows. Stocks nudged five tonnes higher to 6,145 tonnes while cancelled warrants slipped five tonnes to 510 tonnes.
Steel was indicated at $185/235, cobalt at $23,500/24,000 and molybdenum at $11,500/12,000.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)