By: Martin Hayes

London 15/10/2012 - Base metals were struggling during Monday LME pre-market trading, not far off fresh multi-week lows hit in Asian trading - the annual LME Dinner week kicked off amid weak sentiment and economic pessimism, traders said.

Business was lively at times on Select, suggesting that Friday's acceleration lower had kicked off fresh technical and investment interest, with today also seeing trading against the October 'third Wednesday' prompt date. All the metals set fresh lows for the current downswing.

"As LME Week gets under way, we would expect some choppy trading as the bearish and bullish arguments get aired. On balance we still see these pullbacks after the recent rallies as consolidation," William Adams of FastMarkets said.

The focus was on China this morning, with the market making a muted response to the weekend trade report ahead of the country's third-quarter GDP report.

"We've found, in the past, that the metals tend to be "buys" when they look their worst and this just may be the dip to get in for our expected fourth-quarter rally," broker RBC said.

In the much-anticipated Chinese trade data over the weekend, exports grew faster than expected in September, calming concerns about a slowdown in the economy.

Data issued on Saturday showed that exports increased 9.9 percent year-on-year against 2.7-percent growth in August. Exports had been forecast to rise some five percent.

In currencies, the euro was trading around 1.2950 against the dollar amid uncertainty over whether Spain will seek a bailout package. Later today, the US data flow includes August business inventories, September retail sales figures and the October Empire State Manufacturing Index.

Business is expected to be choppy this week, given thinner-than-usual conditions that are typical of LME Week. This could see snap reaction rallies.

"In the medium term we feel there is room for prices to remain steady, supported by Chinese infrastructure spending, while in the longer term we feel the drag from Europe will keep prices capped," Adams added.


COPPER SWINGS UNDER $8,100/T

Copper hit $8,050, its lowest since September 13, and then settled at $8,099 per tonne, a $26 loss from Friday. In the Chinese data, total copper imports rose to a four-month high of 395,000 tonnes from 356,000 tonnes in August.

Warehouse inventories fell a net 3,625 tonnes to 212,275 tonnes.

Aluminium dropped to $1,974, the lowest since September 7, and then edged to $1,980, a $15 loss. China imported 102,000 tonnes of unwrought aluminium and semis in September, up 55 percent year-on-year but down 13 percent from August.

Inventories dropped 4,625 tonnes to 5,064,950 tonnes.

In other metals, lead hit $2,122, its lowest since September 13, and then traded at an unchanged $2,131. Stocks rose 4,975 tonnes to 301,700 tonnes. Zinc set a five-week low of $1,917.50 before recent trade at $1,920, a $15 loss, with stocks surging by 26,400 tonnes to 1,036,625 tonnes.

Nickel dropped to its lowest since September 14 at $16,960 before edging back to $17,167 against $17,075 - inventories jumped 1,734 tonnes to 126,342 tonnes. Tin touched $21,000, a three-week low, with recent trade at $21,100, down from $21,315.

Steel was quoted at $345/360, while the minors were neglected.


(Editing by Mark Shaw)