Base metals trawled around the day's highs in Wednesday afternoon trade on the London Metal Exchange (LME), with technical rallies in aluminium and copper ushering contracts to higher closes, traders said. "It has been an extremely technical day. Aluminium led the way, breaking down and then breaking back up," one said.
A softer dollar assisted the upturn, as did higher oil prices and gold, which suggested the broader investment appetite for commodities had not waned.
But apart from flurries of spread-based activity triggered by backwardations, overall volumes remained low as the market was largely constrained in neutral chart parameters.
"Apart from zinc, which is trending higher, the rest of them are ranging," the trader said.
Aluminium earlier fell to $1,790 a tonne, its lowest since December 13, when Far East selling and a breach of the key 100-day moving average (MA) around $1,805 triggered automatic sell stops.
But consistent trade support around the lows reversed the trend, bringing the market above the MA - a sensitive area for some signal-based traders - with short covering maintaining the rally.
Last trade was at $1,834, nudging against the shorter MAs and up from the $1,807 Tuesday kerb close.
Copper followed a similar pattern, touching a low of $3,022.50, although the fall was unconvincing and the market was mostly higher throughout the session.
"The spread tightness helped out a bit," the trader said.
The cash-to-threes spread traded out to $168 backwardation - its highest since April 2004 and some 30 percent wider since the start of last week. On Tuesday it stood at $157.
TOM/next (tomorrow/next day), which reflects belated business against the previous day's prompt, traded out to $15 backwardation, before coming back in to $5.
Cash/one day traded at $8.00 backwardation, while cash/February 5 traded at $109 premium.
Three months ended at $3,074, up $20, although this was still well off Monday's peak at $3,120.
Spread tightness aided lead, which rose $13 to $923, while zinc recovered from early lows to close at $l,288/1,289, also up $13.
Tin stalled at $8,000 resistance but finished $225 higher at $7,950, while nickel closed at $14,400, up $190.
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