Copper dipped on Wednesday, giving up some gains from the previous session when it hit two-week highs, as some traders locked in profits and other investors remain concerned about sluggish demand amid weak Chinese copper imports.
"The macro mood at the moment is 'glass half empty' - the overall economic outlook remains very much a mixed picture," said analyst Duncan Hobbs at Macquarie in London. Benchmark copper on the London Metal Exchange (LME) shed more than 1 percent to a session low of $7,563.25 a tonne, after rising 2.4 percent in the previous session on short-covering, traders said. It closed at $7,575 from $7,625 on Tuesday. Copper hit its highest in almost two weeks on Tuesday at $7,645.25 a tonne, extending a rebound from an 8-month low near $7,330 last week. Prices are still down more than 4 percent on the year.
Data showing that China's March copper arrivals fell by a sharp 30 percent from a year ago, dimmed the outlook for the red metal, even though China's overall trade data was more upbeat, reinforcing views of a gradual recovery under way in the world's second-largest economy.
"The China data was relatively poor. The imports where up from February but what matters really is how much they were down from last year," Standard Chartered metals analyst Daniel Smith said. Standard Chartered this week downgraded its forecast for the average 2013 three-month copper price to $7,613 a tonne from $8,325. Also weighing on the market was downbeat sentiment at the CESCO/CRU World Copper Conference in Santiago, the world's biggest gathering dedicated to the red metal.
"My sense of feedback from colleagues who are there is that the mood on the market is certainly on the soft side... even the Chilean strike action does not appear to be worrying people in the same way it might have done a year or two ago," Hobbs said. Workers staged a 24-hour strike at world No 1 copper producer Codelco on Tuesday. Stainless steel ingredient nickel finished at $16,050 a tonne, down more than 1 percent from a close of $16,220 on Tuesday.
Nickel has shed more than 12 percent since the start of February, but it may benefit from some restocking during the current quarter driven by peak seasonal demand for stainless steel, said Wiktor Bielski, head of commodities research at VTB Capital in London. LME nickel stocks rose by 912 tonnes on Wednesday, taking total LME inventories to 167,700 tonnes, a new record high. Lead closed at $2,090, flat from the precious day, zinc ended at $1,910 from a last bid of $1,920 on Tuesday. Aluminium, untraded at the close, was last bid at $1,909.50 from $1,919 a tonne and tin slipped to close at $22,875 from $22,970.
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