London 06/01/2016 - Base metals swung away from their early-afternoon lows during late-Wednesday LME trading to close mixed although the moves were end-of-day covering - sentiment remains dour, traders said.
Copper dropped to a two-week low at one point while aluminium and nickel declined to the weakest for one month. Among the other metals, tin was hit by technical sell-stops, hitting a four-month low, with lead and zinc touching two- and one-week lows respectively.
"It is the mood in general - 'risk-off', low volumes, the big picture looks grim and people are putting their cash in the safe havens (gold and the dollar)," a floor trader said.
"It has been very sloppy today - the volumes have been light, sentiment does not seem to be turning at all and it only takes a little bit of selling to put the pressure on," another trader said.
Commodities are seeing diminishing risk appetite - oil has fallen to an 11-year low - with safe havens such as gold and the dollar attracting investor interest. Gold today hit a $1,093 per ounce six-week high amid the escalating tensions between Iran and Saudi Arabia and the test firing of a nuclear missile by North Korea.
A run of sub-par US releases did little to assist either - the December services PMI and ISM non-manufacturing PMI as well as November factory orders all disappointed.
This followed further soft China releases earlier. The country's December Caixin Services PMI at 50.2 was below the market forecast of 52.3 and November's reading of 51.2, while the yuan fell against the dollar to its lowest since September 2010.
"The China story says it all - each bit of data is not good and, although you see all the stories about cutting this or stockpiling that, it only prevents it falling for a while and you never really see much of a rally," the second trader said.
There is likely to be little respite in the medium term, with charts and fundamentals both negative.
"Sometimes a New Year sees a bit of money coming into the markets. Not this time, and with the Chinese New Year a few weeks away it could be a bad January for metals," a third trader added.
In the metals, copper fell to $4,593 on option-related sales around midday before partly recouping losses to end at $4,620 per tonne, down $25 on Tuesday's close. In today's warehouse data, copper stocks climbed a net 625 tonnes to 235,850 tonnes and cancelled warrants edged 25 tonnes higher to 38,900 tonnes.
Aluminium was erratic, dropping to $1,456.50 after the January option expiry but then bouncing back to end at $1,475, a $11.50 advance. Today, stocks fell 6,750 tonnes to 2,882,800 tonnes, the lowest for one month.
Nickel was another to end in positive territory, finishing at $8,600, up $50 and above the $8,460 low. There was a chunky increase in warrant cancellations. Cancelled warrants climbed 15,150 tonnes to 178,116 tonnes, a move centred on Taiwan and Singapore. Stocks fell 1,152 tonnes to 440,358 tonnes, the lowest since December 21.
Zinc hit a low of $1,533 before ending at $1,546, down $27. The market ignored stocks falling 3,150 tonnes to 457,325 tonnes, a five-month low. Lead ended at $1,679.50, down $34.50 and just $1 above its low - stocks and cancelled warrants were unchanged.
Tin was volatile, hitting $13,650 at the low on technical sales, before ending at $13,800, a $355 loss. Inventories fell 20 tonnes to 6,125 tonnes.
Steel was indicated at $185/235, cobalt at $23,500/24,000 and molybdenum at $11,250/11,750. Cobalt stocks rose 10 tonnes to an all-time high of 640 tonnes.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)