LONDON: Zinc and other base metals gained on Tuesday after strong retail and factory data in top metals consumer China though further rise in inventories capped copper's gains.
China posted its strongest retail sales growth of the year in November and surging steel production lifted factory output.
"When we were in China in November we talked to some corporates and they were telling us that the on-ground situation has been improving. I think that showed up in today's data," said Xiao Fu, head of commodity market strategy at Bank of China International in London.
Other data showed that growth in Chinese home sales in November was the slowest in a year as more cities tried to cool red-hot prices and the pace of new property investment also fell from recent highs.
But Fu said: "Our sense is that next year, with weakening property growth, there will be more expansionary fiscal policies, so infrastructure will be the main driver for 2017. Next year China will be relatively stable." Benchmark zinc on the London Metal Exchange gained 0.9 percent to $2,756 a tonne in official trading after dipping 0.8 percent on Monday.
Lead was bid 1.5 percent firmer at $2,388, having failed to trade in official activity. Zinc is the top performer on the LME this year with gains of 72 percent fuelled by fears of shortages after some major mines were closed or suspended.
LME three-month copper was the weakest LME performer, edging up 0.1 percent to $5,775 after data showed another big inflow of inventories into LME-certified warehouses.
More than 50,000 tonnes of copper has arrived in the space of two days, sending on-warrant copper stocks - those not earmarked for delivery - up 47 percent to 160,375 tonnes. "We're not seeing big moves in copper, it's more wait-and-see what comes out of the US," said a commodities trader in Perth.
The US central bank is widely expected to raise interest rates for the first time in 2016 at the two-day gathering, which begins on Tuesday. Nickel was bid up 1.4 percent at $11,460 a tonne.
"Given the down trend line from the Nov. 11 high is firmly in place, we expect resistance in the $11,650 area," Dee Perera at broker Marex Spectron said in a note.
Aluminium traded 1 percent higher in official rings at $1,748 and tin climbed 1.6 percent to $21,355.
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