London 30/08/2016 - Base metals ended Tuesday LME trading mixed, with copper selling off to a fresh two-month low after the resumption of trading following an extended weekend break in the UK.
Business was slow - investors are largely sidelined ahead of Chinese PMI and blockbuster US jobs data due later this week.
As well, renewed dollar strength following robust US macro data and Federal Reserve hawkishness at last week's Jackson Hole conference are weighing on metals prices. The dollar index was last at a stronger 95.67.
"The primary focus will be on the dollar and on the tone and tenor of this week’s US macro numbers, culminating in the release of the non-farm payroll number on Friday," INTL FCStone analyst Edward Meir said.
"If the numbers come in on the stronger side, the US dollar should strengthen even more, generating additional headwinds for the commodity group, as the odds for a September rate increase start to mount," he added.
The consensus is for 186,000 jobs to have been added in August. Earlier, Fed vice chairman Stanley Fischer, has been outspokenly hawkish in the last few weeks, said the US is "very close to full employment".
In today's US data, the S&P composite was as expected at 5.1 percent while CB consumer confidence at 101.1 was better than forecast.
In the metals, copper fell to a fresh two-month low. It concluded at $4,607 per tonne, down $8 on Friday's close. Around 16,000 lots changed hands on Select by the kerb close.
The red metal is under pressure from continuing increases in LME stocks - inventories jumped a net 11,650 tonnes today, with the Gwangyang total rising 6,225 tonnes and a 6,825-tonnes increase in Singapore. This builds on last week's jump - more than 60,000 tonnes were delivered into Asian sheds.
Poor premiums in China have encouraged metal owners to deliver onto the LME instead, market participants have said.
"The [price] strength in first quarter of 2016 was heavily influenced by a massive rise in Chinese imports, although these shipments were well in excess of actual requirements, thereby flooding the domestic market," BoA Merrill Lynch Global Research said in a report.
Aluminium ended at $1,630, down $12.50; stocks fell 6,850 tonnes to 2,239,500 tonnes and cancelled warrants were 9,100 tonnes lower at 917,600 tonnes.
Nickel closed $20 higher at $9,830 even after stocks increased 294 tonnes to 370,860 tonnes and cancelled warrants fell 174 tonnes to 110,412 tonnes.
Zinc at $2,312 was down just $2.50m, finding support from tightness along the nearby curve. The benchmark cash/threes spread was last at a backwardation of $3 while cash/Sept was at $7, Cash/Oct at $6.65 and cash/Nov at $1.10.
Stocks and cancelled warrants were both down 875 tonnes at 453,300 tonnes and 24,375 tonnes respectively.
Lead concluded at $1,878, up $3; stocks increased 500 tonnes to 187,725 tonnes.
Tin was last at $18,800, down $90 - stocks fell 45 tonnes to 4,485 tonnes and cancelled warrants rose five tonnes to 1,585 tonnes.
Steel billet was last indicated at $300/325 and cobalt and molybdenum at $25,750/26,250 and $16,000/16,500 respectively.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)