LONDON: Base metals slid on Tuesday with copper and nickel hitting multi-week lows as profit-taking set in following strong gains late last year, a steadier dollar weighed and worries lingered over fading demand in China ahead of the Lunar New Year.
Three-month copper on the London Metal Exchange fell 2.3 percent to $7,046.50 a tonne by 1119 GMT, having hit its weakest since Dec. 22 at $7,035.
Stainless steel ingredient nickel dropped 3.9 percent to $12,360, having slid more than 5 percent to its lowest since Dec. 29 at $12,190.
The dollar's index against a basket of six major currencies stood at 90.73, having pulled up from Monday's three-year low of 90.279. A stronger dollar makes dollar-priced metals costlier for non-US investors.
"(We're seeing) a bit of profit-taking on the back of a strong run. Beyond that we had some trade data from China last week which indicated imports of refined metals have been somewhat slow," said Nitesh Shah, commodity strategist at ETF Securities.
He added, however: "The demand picture looks robust, global PMIs are running close to seven-year highs while supply is likely to remain constrained, so we could see price growth above 5 percent in copper this year."
IRON ORE: Iron ore futures in China ticked up on Tuesday after dropping 2 percent in the previous session, but record stockpiles of the steelmaking ingredient at the country's ports kept a lid on price gains.
Broker Marex Spectron cited disappointing steel demand and more talk of a sell-off across ferrous metals as impacting nickel. It also noted broader risk-off sentiment in the metals markets in China, the world's top metals consumer.
"The Chinese ... have not been the drivers of the metal moves higher over the past few weeks, reflected in the declining onshore premiums," it said in a note.
COPPER, ALUMINIUM SUPPLY: Rio Tinto stuck to a 2018 production target of 510,000-610,000 tonnes of mined copper and 225,000-265,000 tonnes of refined copper. Aluminium production is targeted at 3.5-3.7 million tonnes. For 2017, aluminium production eased 1 percent and mined copper output fell 9 percent.
COPPER, ZINC STOCKS: Headline LME copper inventories have climbed 12 percent since the start of December to 204,650 tonnes. Zinc 'on-warrant' or available inventories have slid 38 percent in two weeks to 112,850 tonnes.
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