London 09/05/2016 - Base metals ended Monday LME trading in the minus column, with many falling to multi-week lows
A firmer dollar and disappointing Chinese trade data have weighed on sentiment in start-of-week trading, traders said.
"The tone wasn't brilliant from the start after those Chinese [copper import] numbers and the dollar has been higher as well. This is the 'sell-in-May' month so there may be a bit of lightening positions to come," a trader said.
Chinese trade data released earlier disappointed - imports of unwrought copper and copper products totalled 450,000 tonnes in April, down 21.8 percent from March's record high of 575,650 tonnes.
"Imports fell due to worsened spot arbs since late February. Inventories at bonded warehouses remained ample as premiums hovered around $50/t, preventing further increase of import volumes in the following months," Citi Bank said in a note.
Still, China's trade balance in April was 298 billion yuan in yuan terms and $45.6 billion in dollar terms. This compared to market forecasts of 250 billion yuan and $40.3 billion respectively.
Dollar strength was reflected in the slump in prices. The dollar index was last higher at 94.10 despite weak US non-farm payrolls data on Friday.
We think the stronger dollar is behind much of the selling we have been seeing so far in May, just like it was responsible for the initial run-up," INTL FCStone analyst Edward Meir said.
"Base metals are also retracing on growing perceptions that the recent rallies they have enjoyed may have gotten ahead of themselves and thus a pullback was warranted," he added.
Copper closed at $4,686 per tonne, its lowest since April 12 and down $124 on Friday's close.
"Copper is well and truly in a rut, range-wise, and it may struggle a bit now. It has failed a few times above $5,000, so it may be it is in for a test of the base around $4,650," a second trader said.
The market was busy today - more than 28,000 lots changed hands on Select. Stocks were little changed, rising a net 575 tonnes to 159,600 tonnes.
Aluminium ended $37 lower at $1,561 - its weakest since mid-April - with stocks and cancelled warrants both 4,925 tonnes lower at 2,612,625 tonnes and 1,066,825 tonnes respectively.
Zinc was last at $1,835, down $53 and also its weakest since mid-April. A pocket of tightness has appeared, with cash/May trading at a backwardation of $1. Stocks slipped 875 tonnes to 394,300 tonnes.
Nickel concluded at $8,605, down $460 and its lowest since early April. Stocks fell 594 tonnes to 414,690 tonnes.
Lead at $1,730.50 was down $20.50. Stocks were little changed, slipping 250 tonnes to 173,775 tonnes, while cancelled warrants fell 325 tonnes to 77,075 tonnes.
Tin at $17,225 was $195 lower after stocks fell 75 tonnes to 5,875 tonnes.
Steel billet was last indicated at $65/115 and cobalt and molybdenum at $23,000/23,500 and $14,250/14,750 respectively.
(Additional reporting by Kathleen Retourne and Martin Hayes, editing by Mark Shaw)