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Base metals move sideways

on quiet pre-market

LONDON: Base metal prices sidled sideways in slow conditions on the London Metal Exchange (LME) early Wednesday, showing every sign that most markets were in for a period of consolidation.

Tin was among the most perky, again testing technical resistance at $6,500/520 a tonne.

Traders said chart-based buying could trigger pre-set buy orders above those levels, and trade sellers were holding off in anticipation. But selling was expected to resume above the resistance level, limiting gains.

Tin was last quoted at $6,480/95 from $6,480.

"On previous rallies we have seen very good selling from the Chinese and Japanese," said one trader. "The speculators may try to trigger stops above $6,520, but the limit (on the upside) could be $6,600."

Traders noted strong nearby spreads in tin, with June/three months at $30 backwardation bid.

But some said there was still time for short positions around the June date to cover, preventing a flare-up in spreads around that time.

Copper was little changed at $2,550/54 from $2,555 as values consolidated recent gains.

Japanese traders said China was still actively buying copper on the spot markets, supporting the view of traders in London that LME stocks in Singapore were likely to continue to fall on Chinese buying.

The main upside target for copper was pegged at $2,594, where selling pressure was likely to emerge.

"With this market surplus looming and the current attractive forward price for producers, rallies should provide good selling opportunities," said Martin Squires of Rudolf Wolff.

Aluminium held steady above $1,600, edging up to $1,604/07 from $1,604.

Nickel edged up to $8,200/20 from $8,175. Traders were monitoring events at Russian producer Norilsk, where gas supply cutbacks were affecting some operations.

An official said no final production had been lost, but some of the plant's processing workshops had reduced production.

Lead and zinc were little changed in quiet conditions. Zinc was at $1,068/69 from $1,069 and lead at $801/03 from $801.

Alloy was last at $1,375/85 from $1,370.-Reuter