London 18/05/2016 - Base metals, despite clawing back some early losses, generally traded at lower levels on the LME on Wednesday when a steadier dollar encouraged liquidation, traders said.
"The dollar is looking a bit better bid and there is a bit of Fed stuff soon - we can't see much to get the metals trend changed," a trader said. "The market is looking a bit lifeless and there has been a bit of stale liquidation, given the trend this week. Probably, we are looking at a run on the downside."
On an otherwise slow day for macroeconomic releases, a hardening perception that US policy tightening will happen sooner rather than later is taking hold.
"Rate jitters and a stronger dollar are generating some weakness over the commodity group, with base metals being hit particularly hard,"INTL FCStone analyst Ed Meir said.
The US currency was holding around 1.1275 against the euro ahead of the publication of the minutes from the last FOMC meeting later. Spot Brent crude oil, meanwhile, was around six-month highs at $49.60 per barrel and is seen regaining $50.
"It is not exactly a case of 'sell in May and go away' but the metals had done enough in the rally recently - [becoming] a tad overbought - so the CTAs have been selling here and there," a floor trader said.
In the metals, copper, having earlier fallen to its lowest for nearly three months at $4,563.50, moved back above $4,600 to end at $4,612.50 per tonne, still down $43.50 from Tuesday.
Earlier, warehouse stocks fell a net 100 tonnes to 156,850 tonnes.
Aluminium was an exception and ended at $1,551, up $6 - inventories today fell 4,600 tonnes to 2,571,125 tonnes and cancelled warrants dropped 4,550 tonnes at 1,056,650 tonnes.
In others, nickel was last at $8,635, a $165 loss, having initially dropped under $8,600 to near-one-month lows. Today, stocks declined 1,680 tonnes to 404,178 tonnes and cancelled warrants fell 1,488 tonnes to 122,388 tonnes.
Lead was $19.50 lower at $1,702.50 after also nearing a one-month low - stocks and cancelled warrants both fell 850 tonnes to 180,450 tonnes and 23,475 tonnes respectively.
Zinc ended $16 lower at $1,888 - inventories fell 1,000 tonnes to 388,475 tonnes. Tin at $16,775 was down $175 after stocks rose 105 tonnes to 6,615 tonnes.
Steel was quoted at $65/115, cobalt at $23,250/23,750 and molybdenum at $14,800/15,300.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)