London 23/05/2016 - Base metals were hit by a fresh wave of selling pressure during Monday LME trading before limping towards the close to finish little changed from the previous session.
"Metals are now testing support levels and it is difficult to stop the momentum lower. The shorts are in command and longs have liquidated, volumes are not fantastic and as we move towards summer it is difficult to get excited," Societe Generale analyst Robin Bhar said.
The hawkish tone in the FOMC minutes released last week has led to talk that a US interest-rate rise could come as soon as June. The dollar bounced on this news - the dollar index was last at 95.32.
"There is still uncertainty - the Fed may not want to rise in June ahead of the Brexit vote. A lot can happen between then and now. They were hawkish in December and then they went cold but markets are enthralled by the Fed," Bhar added.
In data today, EU flash manufacturing data disappointed at 51.5 against a forecast 51. while the flash services PMI was close to expectations at 53.1. The US flash manufacturing PMI at 50.5 missed the forecast 51.0 although consumer confidence for May at -7 was better than the predicted and previous -9.
Adding to the softer tone was a lower oil price. Brent crude had pushed towards $50 last week amid supply concerns but at $48.12 it was last down 1.3 percent on the pre-weekend close.
In the metals, copper was stuck around three-month lows - it finished at $4,562 per tonne, down $16 but off the earlier low of $4,545.
Chinese copper imports fell 24.5 percent month-on-month in April after the positive arbitrage between the SHFE and LME disappeared.
"The weakness in April is a sign of weakness in momentum for China's domestic copper market. In the months ahead, we think China’s copper imports will continue broadly to disappoint, consistent with the view of a slowing domestic economy, modest year-on-year demand growth, and weaker prices in second half," Barclays noted.
Stocks fell a net 2,725 tonnes to 155,000 tonnes while cancelled warrants fell 1,525 tonnes to 30,900 tonnes.
Aluminium at $1,554 was up $7 - stocks fell 5,300 tonnes to 2,555,250 tonnes while cancelled warrants rose 7,750 tonnes to 1,139,250 tonnes.
Nickel ended at session and April 5 lows of $8,330 despite lower availability. Cancelled warrants jumped 12,726 tonnes to 136,332 tonnes - fresh cancellations climbed 11,136 tonnes in Kaohsiung. On-warrant material at 266,556 tonnes is now at its lowest since February.
Zinc fell $25 to $1,841 although stocks dropped 975 tonnes to 385,775 tonnes and cancelled warrants increased 1,250 tonnes to 29,375 tonnes.
Lead ended at $1,657, down $18 and around four-month lows. Stocks and cancelled warrants both fell 125 tonnes to 179,975 tonnes and 74,075 tonnes respectively.
Tin slumped to its cheapest since March 1 - under increasing pressure from a continued build-up in LME inventories, it broke below the key $16,000 level to hit a multi-week low today.
It pared some of those losses later in the session to close at $16,100, still down $350. Inventories rose 75 tonnes to 6,810 tonnes, their highest since August 2015.
"We suspect that fund liquidation - in an already thin market - coupled with rising stocks is weighing on the market," INTL FCStone analyst Edward Meir said.
Steel was indicated at $65/115, cobalt at $23,000/23,500 and molybdenum at $14,800/15,300.
(Editing by Mark Shaw)