Copper prices slipped on Tuesday after five days of gains, unnerved by a sell-off on share markets and sapped by uncertainty before a meeting of US and Chinese leaders.
Both copper and zinc were in the red despite signs of shortages developing of physical metal, said analyst Nicholas Snowdon at Deutsche Bank in London. "It's difficult to see past the major macro events. Those will continue to be the key drivers, such as the build-up to the G20 and waiting for signals in terms of where US-China trade negotiations will head," he said.
US President Donald Trump is expected to meet Chinese President Xi Jinping on the sidelines of the two-day G20 summit in Argentina, which begins on Nov. 30. "But when you look at trends in the refined copper market, particularly ex-China, and the on-shore Chinese refined market for zinc, there are some clear signs of tightness, which is limiting the arguments for being short of either of those metals," Snowdon added.
Also weighing on base metals was risk-off sentiment as world stock markets fell in a tech-led sell-off, while the dollar index rallied from a two-week low, making commodities priced in the greenback more expensive for buyers using other currencies.
Three-month copper on the London Metal Exchange shed 1.2 percent to $6,184 a tonne in closing open outcry activity after rising about 4 percent over the previous five sessions.
The premium of LME cash zinc over the three-month contract soared to $97 a tonne by Monday's close, the highest since at least June 2009, the earliest date for which data is available. It was quoted at $85 on Tuesday.
This is due to shortages of metal for immediate delivery as investors with short positions seek to close out or roll over their contracts ahead of the November expiry on Wednesday. LME three-month zinc fell 1.9 percent to end at $2,551 a tonne.
LME on-warrant aluminium inventories, those not earmarked for delivery, rose by 14,800 tonnes to 785,875, daily LME data showed, and have surged by 30 percent since early October. LME aluminium added 0.3 percent to finish at $1,940 a tonne. Global primary aluminium output rose to 5.414 million tonnes in October from 5.301 million tonnes in September, data showed.
Nickel fell 0.8 percent to end at $11,095 a tonne, the lowest since Dec. 14 last year. "The correction looks poised to persist towards the multi-month down channels supports at $11,040," Stéphanie Aymes, head of technical analysis at Societe Generale, said in a note. Lead gave up 2.1 percent to close at $1,961 a tonne and tin lost 1 percent to $19,400.
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