London 20/09/2016 - Base metals apart from aluminium finished Tuesday LME trading higher on improved sentiment, albeit in thin trading conditions.
Copper managed to break above $4,800 to set a fresh four-week high but failed to hold onto all of its gains - it closed at $4,793 per tonne, still up $17 on Monday's close, with 13,100 lots changing hands by the kerb close.
Commerzbank attributed to turnaround to "higher risk appetite among market participants, as reflected in rising share prices, a sharp oil price increase for a time and a weaker US dollar".
"Short sellers are also likely to have covered their positions and withdrawn," it added..
The Federal Open Market Committee's (FOMC) two-day meeting starts today and has kept investors sidelined while they await further clarity; policymakers are deciding whether the economy can sustain higher interest rates after weeks of mixed data.
In US data, building permits in August at 1.14 million were below the forecast of 1.17 million. Housing starts over the same period also came in at 1.14 million, again missing the predicted 1.19 million.
Despite tomorrow being Third Wednesday - when the September date will become prompt - moves in the nearby spreads have been routine. The tightness that was present in aluminium's 'Tom'/next has fizzled out to a contango of $0.40 - it hit $8 at the end of last week.
This is probably due to the fact that the dominant holder has disappeared, having previously held 30-39 percent in the tom/next holdings. The lightweight metal was last at $1,576 per tonne, down $7.
In today's warehouse data, copper stocks fell a net 1,675 tonnes to 347,950 tonnes and cancelled warrants fell 3,475 tonnes to 54,500 tonnes.
According to Citibank, market participants anticipate a further 100,000-150,000 tonnes of deliveries into listed warehouses over the next few months. Meanwhile, Macquarie has reduced its 2016 forecast to $4,685 per tonne, down 0.3 percent on its previous projection.
Aluminium bucked the trend, closing $6 lower at $1,577. Stocks climbed 6,700 tonnes to 2,168,175 tonnes.
Nickel finished at $10,310, up $70 and around one-week highs. The metal had returned above $10,000 on Monday on expectations that more miners will be suspended when the Philippines publishes its mining audit results on Thursday.
"Until Friday, nickel had been looking weak/neutral on the charts. [Monday's] move suggests more gains are likely in the short term but we can't talk about a resumption of the uptrend just yet," broker Triland noted.
Stocks fell 1,074 tonnes to 365,784 tonnes and cancelled warrants fell 2,004 tonnes to 114,648 tonnes.
Zinc was the day's best performer, ending $49 higher at $2,300 - its highest since September 9 - with stocks unchanged at 444,400 tonnes. Lead concluded at $1,981, an increase of $33; stocks were up 875 tonnes to 189,025 tonnes.
Tin nudged $55 higher to conclude at $19,475. Stocks and cancelled warrants both edged 75 tonnes lower to 3,750 tonnes and 765 tonnes respectively.
Steel billet was indicated at $300/325, cobalt at $26,500/27,000 and molybdenum at $15,150/15,650. Molybdenum stocks and cancelled warrants both fell 12 tonnes to stand at zero.
(Additional reporting by Ewa Manthey, editing by Mark Shaw)