LONDON: Zinc and other base metals prices retreated on Tuesday, weighed down by profit-taking and producer selling after data showed China's property market had slowed.
Zinc was also hit by another rise in so-called live inventories in London Metal Exchange (LME) warehouses, indicating that supplies were still available despite the closure of big mines.
"We're giving back a bit because we had a really strong day yesterday. I suspect there was some producer selling coming in on copper, zinc and possibly aluminium," said Robin Bhar, head of metals research at Societe Generale in London.
"I suspect we had some profit-taking in Shanghai metals and that spilt over into Europe. But there's nothing that damages the chart picture and I would expect we would get another push to the upside later today."
House prices in Beijing fell for the first time in more than two years in June, while Shanghai declined further and Shenzhen stalled, pointing to significant cooling in China's biggest real estate markets, official data showed on Tuesday.
Construction is a big driver for metals demand in China, the world's largest consumer of industrial metals.
ZINC: Benchmark LME zinc failed to trade in official open outcry activity and was bid down 1.4 percent at $2,776 a tonne after gaining 1 percent on Monday.
ZINC INVENTORIES: On-warrant stocks of zinc in LME-registered warehouses - those not earmarked for delivery and therefore available to investors - climbed 10,500 tonnes on Tuesday and have nearly doubled since last week.
The inflows reminded investors that hundreds of thousands of tonnes of "hidden" inventories were estimated to be in non-LME warehouses, but the current inflows were probably linked to the expiry of the LME July contract on Wednesday, Bhar said.
"We've seen big arrivals before when there are shorts electing to deliver," he said.
COPPER: Three-month LME copper traded down 0.4 percent to $5,975 a tonne in official rings, after climbing 1.2 percent in the previous session, when prices hit 4-1/2-month highs.
PERU QUAKE: An earthquake with a magnitude of 6.4 struck off the coast of major copper producer Peru on Monday, the US Geological Survey said. Peru's civil defence institute Indeci said there was no risk of a tsunami and no immediate damage.
RIO TINTO: The mining company posted weaker second-quarter copper output, but reiterated its full-year production forecast. ALUMINIUM: LME aluminium was bid 0.7 percent lower at $1,905 a tonne. Alastair Munro at broker Marex Spectron said the metal was under pressure due to selling from speculators and CTAs (commodity trading advisers). "Would expect support in the $1,890 area," he said in a note.
PRICES: Nickel was bid 0.4 percent firmer at $9,640 in official rings, lead traded down 0.8 percent at $2,278 and tin traded 0.3 percent firmer at $19,975.
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