MELBOURNE: London copper edged back towards one-month lows hit earlier this week on Thursday as the upcoming Christmas holidays drained markets of liquidity and direction.
The tone in wider markets was subdued. Asian shares struggled, taking their cues from a lacklustre day on Wall Street as investors locked in gains ahead of the break while China soothed worries of a year-end liquidity crunch.
At least one Chinese state lender provided liquidity support worth several billion yuan to fund management firms via short-term lending tools on Wednesday, two sources with knowledge of the matter said.
"Trading is slowly grinding to a halt ahead of the upcoming Christmas break and we expect more of the same through year-end," said analyst Ed Meir of INTL FCSTONE in a report.
Three-month copper on the London Metal Exchange slipped by 0.3 percent to $5,498 a tonne by 0325 GMT. Prices fell to the lowest since Nov. 21 on Monday at $5,459 a tonne but are still up about 17 percent this year after demand surpassed expectations.
Profit-taking pulled down two of the year's top performing metals, with LME zinc and LME lead easing around 1 percent, and trimming the year's gains to 60 percent and 20 percent respectively.
In news, China's zinc smelters are accepting record low fees to produce metal amid a shortage of ore, while winter mine closures are likely to force plants to cut output early next year, industry sources said on Wednesday.
Meanwhile, a small Canadian miner is confident Donald Trump's U.S. presidential win will let it proceed with an application for a copper and gold mine in Alaska that has been stalled almost three years by environmental regulators aiming to protect the world's biggest sockeye salmon fishery.
Zambia will scrap a plan to impose a 7.5 percent import duty on copper concentrates from Jan. 1, Finance Minister Felix Mutati said on Wednesday.
Shanghai Futures Exchange (ShFE) copper slipped 0.9
percent to 44,750 yuan ($6,442) a tonne. ShFE zinc , nickel and lead all fell around 1.5 percent.
U.S. home resales unexpectedly rose in November, reaching their highest level in nearly 10 years, likely as buyers rushed into the market to lock in mortgage rates in anticipation of further increases in borrowing costs.
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