London 01/02/2016 - Base metals moved away from earlier lows during late-Monday LME trading amid some day-trade covering but prices were still mixed at the end of the first day of the new month.
The complex started February on a largely sluggish note, with today's worldwide factory activity economic figures, particularly those of China, dampening the mood and stifling attempts to extend last week's late upturns, traders said.
"It did not have a lot going for it from the 'get-go' as those Chinese numbers were bad. They were expected, and no real surprise, but it just sets a bad tone for the day," a floor trader said.
As well, equity markets were under pressure, crude oil's price stalled and risk appetite was more centred on gold again.
"It was the first day of the new month but there was nothing really to encourage some buying - if anything, it has been 'risk-off' so far," the trader added.
US data this afternoon rounded off the latest state of play in global manufacturing last month. The final manufacturing PMI was 52.4 while among other figures December construction spending rose just 0.1 percent - it had been seen increasing 0.6 percent.
Earlier today, prices were put on the defensive after China's official manufacturing PMI fell to 49.4 from 49.7, while the Caixin manufacturing PMI was at 48.4.
In the other PMI data, European figures were mixed - readings from Spain and Germany rose, France's at 50 was flat and Italy dropped to 53.2. The EU-wide number was flat at 52.3.
With Chinese New Year set to start on February 8, moves in metals could get choppy - they may be susceptible to some short-covering, market participants said.
"We are looking at a patchy week - its coming up to [Chinese] New Year so a few people may want to bully prices. As well, there will be the usual noise surrounding the US jobs report on Friday. The market will get a bit jumpy and thin at times," another trader said.
In the metals, copper fluctuated above $4,500 before ending the first day at the LME's new trading floor at $4,560 per tonne, down just $1 on Friday's close. The move away from the lows was helped by a widening backwardation - the benchmark cash/threes rate was around $11.25.
Earlier, warehouse stocks fell a net 2,975 tonnes to 239,400 tonnes and cancelled warrants were 1,100 tonnes lower at 71,625 tonnes.
Aluminium was last quoted at $1,521.00/1,521.50, up $2.50, with its cash/threes spread at a $3.25 backwardation - there is tightness in its cash/March and cash/April dates. Earlier, inventories and cancelled warrants both fell 5,625 tonnes to 2,795,825 tonnes and 889,775 tonnes respectively.
Zinc climbed smartly away from sub-$1,600 levels to close at $1,648, up $25; its cash/threes was in a $4.25 backwardation. Adding to the perceived tightness was a 2,700-tonne stock fall to 472,050 tonnes and a 7,825-tonne rise in cancelled warrants to 98,750 tonnes - there were 10,525 tonnes of fresh cancellations in Port Klang.
Lead concluded $14 higher at $1,718 - today stocks fell 775 tonnes to 188,125 tonnes. Cash/threes was also at a backwardation of $2.50. Nickel was under pressure, finishing at $8,460, a $200 loss, although stocks dropped 1,638 tonnes to 446,676 tonnes.
Tin finished quietly at $14,800/14,810, an $80 loss. The market shrugged off talk that China plans to commercially stockpile 20,000-30,000 tonnes of the metal. Its spreads, however, were tight - cash/threes was at a backwardation of $49, while inventories fell 155 tonnes to 5,470 tonnes.
Steel billet was indicated at $185/235, cobalt at $21,500/22,000 and molybdenum at $11,500/12,000.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)