Copper slipped from a one-week high on Tuesday on uncertainty about growth in top metals consumer China and worries that upcoming trade data may be weak. Three-month copper on the London Metal Exchange closed 0.1 percent lower at $6,671, after hitting a session high of $6,710, the strongest since April 2. It gained 0.9 percent on Monday.
Last week China unveiled measures to support economic growth, cutting taxes for small firms and speeding up rail construction, but there is uncertainty whether more stimulus plans will be forthcoming.
"In the second quarter we'll probably see some more soft stimulus in China, but they won't use their full arsenal. They are very, very aware of the housing bubble," said analyst Andrey Kryuchenkov at VTB Capital in London. Chinese GDP data due next week is expected to show the world's second biggest economy grew at its slowest rate in five years in the first quarter, according to a Reuters poll. Trade data on Thursday from China, which accounts for 40 percent of global copper demand, may not be impressive.
"The March figures will no longer have been distorted by the New Year's festival and are likely to reveal somewhat weak import dynamism in the case of base metals," Commerzbank said in a note. Nervousness has resulted in low volumes and volatile moves as investors probe the market, a trader said. "People are trying to find out where the market is going to go and when they fail they get out of it."
LME copper has been trading in a narrowing range this month - with $6,585 a tonne the bottom and $6,734 the top, a chart pattern that suggests a price breakout may be on the cards. "We were considering taking a short position, but the way prices are holding up at the moment, we don't think there's much downside in the short term," said Tim Radford, analyst at Sydney-based consultancy Rivkin. Cash LME prices have also dropped to a discount against three-month prices for the first time in around four months, signalling more availability of metal in western markets.
In other metals, nickel closed 0.3 percent higher at $16,455, tin ended 0.1 percent lower at $23,205 and lead closed up 0.4 percent at $2,073. Zinc ended 1.2 percent higher at $2,026, having earlier hit its highest since March 11 at $2,028. Aluminium closed 0.1 percent higher at $1,819. A lack of ready aluminium supply has narrowed the price gap between cash and benchmark aluminium prices to the least in 10 months. Cash aluminium prices traded $35 below the benchmark, the narrowest since June.