Base metals traded aimlessly during Thursday afternoon open-outcry business on the London Metal Exchange (LME) as the lack of definite direction inhibited speculative interest, dealers said. The major metals backtracked after early highs into the minus column, although support held comfortably, traders said. "The market has died down a bit - there are a lot of backwardations around, which make it difficult to trade at times.
Also, there is a bit of a question about China and growth - how much will they dampen it down?" a trader said.
Others noted that volumes remained very thin, which exaggerated price moves, but sentiment was generally more upbeat compared with the past two days.
"Follow through buying is now needed to confirm this renewed strength otherwise markets are likely to consolidate further until fresh developments emerge," William Adams of BaseMetals.com said in a report.
Copper initially sped higher, touching a peak of $3,092 a tonne before the market reversed to spend most of the session grappling with $3,050 support.
Last trade was at $3,052, down from the previous $3,074.
Attention remained focused on the spreads, with cash/threes at its widest since April 2004. The benchmark spread traded at $170 backwardation, while upcoming February-one day was at a $5.50/6.00 premium.
Tightness between now and next month's 'third Wednesday' has been cranked up, with cash/February trading at a $62 backwardation, while February-March business was at a $48 premium.
Standard Bank said in a monthly forecast it expected copper to see further sideways trading in February as China's import requirements were likely to be minimal due to New Year holidays.
"LME stocks, though, remain low and nearby tightness should limit the downside with a potential floor around $2,900/3,000," Standard analyst Robin Bhar said.
Zinc prices lifted initially after two days of consolidation from Monday's 7-1/4 year high at $1,307. Three months peaked at $1,292.50 before settling at $1,281, down $8
Aluminium fell on profit-taking after a strong performance the previous session bounced the metal soundly away from a seven-week low.
In dull trade, prices closed at $1,822/1,824, a $12 decline, although traders expect support in the $1,800/1,820 range.
In other quiet metals, lead lost $2 at $921/923, but tin was unchanged at $7,950 after hardly moving. Nickel shed $50 to $14,350/14,400, although traders noted that the $14,000 support level continued to be well defended.
The metal was supported by another decrease in LME warehouse inventories, which fell 312 to 17,574 tonnes, their lowest in eight weeks.