By: Martin Hayes

London 16/10/2012 - Base metals were mixed during Tuesday LME premarket trading, with most above Monday's multi-week lows - the steady euro and firmer equities choked off the downside and prompted some buying.

But aluminium set a fresh five-week low, while lead and zinc were not far off a retest of yesterday's one-month lows, with the short-term mood highly uncertain - LME Week developments so far have failed to provide leads, traders said.

"It is just so difficult to call at the moment and a [corrective] bounce cannot be ruled out," a floor trader said. "But most people are just unsure and the market did not really behave as you would have thought [on Monday].".

"The shorts triggered some sell-stop then, pushing it down, and we could see more of that from the CTAs this week," he added.

The euro climbed as high as 1.315 against the dollar from yesterday's close at 1.2952, a one-week high, amid reports in the Financial Times that Spain may be ready to request a ECB rescue package have also added to the strengthened euro.

But the metals are being restrained by Chinese stimulus concerns, with the market preferring to wait for the country's third-quarter GDP report on Thursday.

Data from China over the weekend revealed that exports grew faster than expected in September, calming concerns about a slowdown in the economy - exports increased 9.9 percent year-on-year against 2.7-percent growth in August. Exports had been forecast to rise some five percent.

But third-quarter GDP is forecast to drop to 7.4 percent from 7.6 percent in the second quarter, which would again be below Beijing's growth target of 7.5 percent.

On the data side today, the September CPI for the US and eurozone, August US TIC long-term purchases, the September US capacity utilisation rate and industrial production figures, and the October US NAHB housing market index are all scheduled.


COPPER RALLIES STOUTLY BUT INVENTORY SURGES IN ZINC, STEEL

Copper, which hit four-week lows of $8,050 on Monday, rose stoutly to trade at $8,150 per tonne, up $55.50 from the previous kerb close. Warehouse inventories fell a net 1,550 tonnes to 210,725 tonnes.

Aluminium, however, continued to struggle at sub-$2,000 levels, hitting a new low since September 6 at $1,957.25 before trading at $1,961, a $2.50 loss. Stocks rose 850 tonnes to 5,065,800 tonnes.

Zinc was holding above $1,900, trading at $1,918, a $3.50 advance. But there was a 24,550-tonne jump in stocks to 1,061,175 tonnes, the highest since March 1995.

Steel billet was neglected but witnessed a huge 130-percent jump in warehouse inventories - these rose 68,705 tonnes to 128,544 tonnes, a record high since the contract launched early in 2008. All the material was warranted in Antwerp.

In other metals, lead traded at $2,121, up $15 - stocks dropped 1,275 tonnes to 300,425 tonnes, while cancelled warrants jumped 19 percent to a five-week high of 111,075 tonnes.

Nickel traded at $17,140, up $45, but stocks rose 2,202 tonnes to a 19-month high of 128,544 tonnes. Tin business at $21,250 was up $155, with inventories falling 175 tonnes to 11,255 tonnes.

In the minors, cobalt was quoted at $27,300/28,500, while molybdenum was neglected.


 (Additional reporting by Kathleen Retourne, editing by Mark Shaw)