London 28/12/2011 - Base metals slipped gently during low-key Wednesday LME pre-market trading, with usiness slow to pick up after the long Christmas holiday closure, while similar patterns in other financial markets this morning did little to inspire, traders said.
"It is a bit of a damp squib today. No data out to speak of, so it may well be just trading off the headlines," one said.
The slack trend is expected for the rest of this shortened week, although there could be be pockets of spread activity, as well as flurries of outright end-year booksquaring and 'window-dressing' operations from fund participants.
However, the markets are largely seen winding down for the year-end holiday closures as well.
"That should be the case, apart from Friday, when there may well be some shenanigans, although one would have thought that most people will have done what they need to by now," the trader added.
In Tuesday's US data - markets there were open, unlike the UK - the US October S&P/CS Composite-20 House Price Index came in on Tuesday at -3.4 percent, below the forecast of -3.2 percent. However, the December CB Consumer Confidence index at 64.5 beat the forecast of 58.5.
"Effectively, one bit of data negated the other," the trader added.
Patterns in other markets this morning, meanwhile, provided little incentive for the metals complex. Equities were also drifting gently, while the euro was subdued in a tight range, holding around 1.3070 against the dollar.
"We would now expect trading to remain quiet over the rest of the week, as long as the news flow is quiet too," analyst William Adams of Fastmarkets said.
ALUMINIUM INVENTORIES HIT NEW ALL-TIME PEAK
Aluminium was unsettled by a large warehouse inventory increase, which was a further delivery against the recent abortive December date squeeze. Prices, earlier little changed, slipped to $2,010, a $6 loss from last Friday. Inventories jumped by a net 20,825 tonnes to a new peak of 4,971,375 tonnes, due to a large warranting in Detroit.
Copper was $90 lower at $7,560, holding above the lows as stocks registered a 675-tonne fall to 371,625 tonnes. The supply-side was also in focus, cushioning a recent covering rally - workers at Freeport-McMoRan Copper & Gold's Grasberg mine in Indonesia did not return to work on Tuesday as scheduled.
The union accepted a pay raise to end a three-month strike that crippled the mine's output, but the union is now demanding assurances from Freeport that workers who participated in the strike would not lose their jobs.
In other metals, zinc traded at $1,829, down $26. Stocks resumed a downtrend, however, falling 1,025 tonnes to 875,275 tonnes. Lead was $32 lower at $1,988, although stocks fell a modest 50 tonnes to 356,175 tonnes.
Nickel at $18,470 was $35 down from the previous close - stocks climbed 558 tonnes to 90,600 tonnes. Tin was $265 lower at $19,035 with inventories up 45 tonnes at 11,880 tonnes.
Steel was unchanged at $540/550, while cobalt and molybdenum were indicated at $29,500/32,000 and $28,000/30,750 respectively.
(Additional reporting by Gregory Holt in Singapore. Editing by Clara Denina)