Aluminium bounced from a seven-year low and copper rose as Wall Street clawed its way back from the previous day's slump, but grim US economic data kept sentiment sour. US stocks scrambled back from 12-year lows hit the day before to rise about 1 percent, as reassuring results from Home Depot helped eclipse data that showed consumer confidence plunged to a record low in February..
Aluminium for delivery in three months on the London Metal Exchange fell to $1,279 a tonne, its lowest since November 2001, before rising to close at $1,329 from $1,288 on Monday. Copper ended the day at $3,285 a tonne compared with $3,231 at the close on Monday. "When we test fresh lows there is always a bit of a bounce back up, with technical buying," said VTB Capital analyst Andrey Kryuchenkov, adding that the modest recovery on Wall Street helped to lift metals.
Inventories of industrial metals in LME registered warehouses have jumped massively as slowing industrial activity across the globe has slashed demand for metals. LME warehouse inventories of aluminium - used in transport and packaging - leapt by 13,125 tonnes to stand at a record high of 3.17 million tonnes, having risen more than 35 percent since December. Stocks of copper, used extensively in construction, rose 1,950 tonnes to 544,700 tonnes, the highest since October 2003.
In China, low prices and slumping demand have forced the central government to buy metals as reserves, part of Beijing's plans to support smelters during the current slowdown. The State Reserves Bureau (SRB) has called a meeting in Beijing on Wednesday to buy refined zinc from smelters, its second purchase in less than two months, sources from smelters said on Tuesday.
Talk of SRB buying to boost reserves and the "very tight availability" of copper scrap should underpin the prices, analysts said. Zinc edged up to $1,111 from $1,098 a tonne. Key stainless steel ingredient nickel rose to $9,800 from $9,550 a tonne. Battery material lead dropped to $995 from $1,020, and tin bid at $10,525/10,550 from $10,405 a tonne.
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