LONDON: Copper and zinc dipped on Thursday, while nickel hit a fresh 10-month low, on concern about demand in top metals market China and scepticism about proposed US tax cuts.
"We are short on base metals currently. On the fundamental side I think that the market is getting worried about the tightening monetary process in China, which has just begun. There will be concrete evidence of an economic slowdown in the months ahead," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
"Also the Trump reflation trade is still unwinding because the market is not convinced that the tax package will be approved by Congress."
The pace of expansion in China's manufacturing sector likely slowed this month, a Reuters poll showed, as factory-gate price-growth slowed and authorities moved to tackle risks in the property market and credit growth. Data is due on Sunday, April 30.
FUNDAMENTALS
COPPER: Three-month copper on the London Metal Exchange traded down 0.1 percent at $5,712 a tonne in official open outcry activity, after closing little changed from the previous session. Prices on Wednesday touched the highest since April 18 at $5,738, recovering from a more than three-month low hit earlier this month.
Copper is vulnerable to further losses if it fails to break above resistance of $5,750, Torlizzi said.
ZINC: The LME price of the metal mainly used for galvanizing steel was bid down 0.3 percent at $2,618, having failed to trade in official rings.
MARKET BALANCE: The global zinc market is forecast to register a deficit of 226,000 tonnes in 2017, the International Lead and Zinc Study Group (ILZSG) said.
This was not as deep a deficit as a consensus estimate of 392,000 tonnes in a Reuters January poll.
The ILZSG said the lead market would be close to balanced this year.
NICKEL: The metal mainly used in stainless steel hovered above its lows after Philippine Environment Secretary Regina Lopez said she would ban open-pit mining in the country, toughening a months-long crackdown on the sector she blames for extensive environmental damage.
LME nickel was bid down 0.1 percent at $9,220 in official rings after touching a fresh 10-month low of $9,215. "Nickel closed on daily basis below $9,200 on Monday, which opens it up to new selling pressure. I have a target of $8,800," Torlizzi said.
WIDER MARKETS: Metals felt pressure as investors withdrew from riskier assets. A record-setting rally in world stocks ran out of steam on Thursday, with unconvincing US tax cut plans cooling investors' spirits and caution setting in as the European Central Bank met.
PRICES: LME aluminium was bid down 0.1 percent in official activity at $1,961.50, lead bucked the weaker trend and was bid up 0.8 percent at $2,203, and tin traded down 0.4 percent at $19,825 in official rings.
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