Base metals steady on LME, copper closes lower

Lower oil and gold prices triggered late profit taking on the London Metal Exchange, taking the shine off record gains for nickel and strong gains on aluminium and zinc, traders said.

Metals took a breather Friday after a volatile trading week that saw record highs on zinc, nickel, lead and tin, while aluminium rose to a four-and-a-half month high.

After another stock decline LME three-month nickel rallied to a record $32,550 a metric ton, up 2.8% on the Thursday PM kerb.

LME stocks fell by 96 tons to 4,836 tons, leaving nickel inventories at under one day of consumption.

LME copper prices held steady for most of the day, but lower oil prices in the afternoon triggered some nervous profit taking that pushed copper to an intra-day low of $7,530/ton, down $125.

LME stocks rose by 2,550 tons to 112,275 tons.

Mixed economic data this week also turned sentiment somewhat jittery with investors hesitant before allocating fresh money to commodity markets, traders said.

Mixed U.S. industrial production and producer price index data saw the metals' rally from the early part of the week stall, while slightly slower third quarter GDP growth in China also gave reason to pause.

LME aluminium held Thursday's gains and traded at around $2,740/ton for much of the day after breaching trendline resistance at $2,700 earlier this week, attracting speculative and systems based buying.

However, losses in the oil and gold markets dragging copper below $7,600/ton pared gains back to around $2,720.

The overall outlook for base metals remains firm, given the threat of supply disruptions at key operations.

The possibility of further disruptions at Inco Ltd.'s nickel Goro mine in Indonesia and French producer Eramet SA's operation in New Caledonia, strikes in the copper market and low inventories could produce further price spikes, analysts said.

LME tin ended the day above the $10,000/ton level after speculative support in the afternoon pushed prices up, attracting technical buying, a trader said.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Thursday PM kerb

Copper 7560.00-7570.00 Dn 105.00
Lead 1499.00-1500.00 Up 4.00
Zinc 3965.00-3970.00 Up 25.00
Aluminium 2716.00-2718.00 Dn 24.00
Nickel 32050.00-32100.00 Up 375.00
Tin 10145.00-10150.00 Up 245.00