London 14/11/2012 - Base metals traded at steadier levels during Wednesday LME premarket trading, with prices comfortably ranging and consolidating the run-up on Tuesday afternoon, ahead of fresh incentives.
"It is mostly a 'drifty' market - one day it drifts down, the next it drifts up," a trader said. "But while we wait for decisions to be made in China, Europe and the US, life goes on and factories still have to function."
Although equities were mixed, support emanated from the euro, which bounced back from two-month lows of 1.2659 against the dollar on Tuesday to stand around 1.2745.
Despite the advances - aluminium set a one-month high on momentum-based buying - short-term uncertainty surrounding the world's major economies, which is set to continue through to early 2013, has left a 'direction-vacuum'.
This is creating spells of volatility at times - on Wednesday, copper set its high and low for the day within an hour in mid-afternoon trading.
As well as China's leadership transition, the eurozone's prospects continue to hinge on the Greek bailout issue and wider worries over sovereign debt in countries such as Spain and Italy.
In the US, the fiscal cliff of $600 billion in spending cuts and tax increases will automatically kick in early next year if a deal between Democrats and Republicans in Congress is not reached before the end of 2012.
For now, movements in other markets and the usual data-flow inputs will dictate intraday activity and fluctuations. US data releases scheduled today include the October PPI and retail sales figures, and September business inventories.
"As always, it will be a case of watching the FTSE, the Dow and the euro," another trader said.
ALUMINIUM HITS BEST FOR ONE MONTH
Aluminium ran up above $2,000 to set a one-month high of $2,004 and then held at $2,000, up $18. Support for the metal's uncharacteristic upside sprint stems from Chinese plans to stockpile metal as well as December date tightness - Dec/Jan traded at $8.50 backwardation. Inventories fell 6,525 tonnes to 5,095,100 tonnes.
Copper briefly peered above $7,700 before hauling back to $7,685 per tonne, up a slight $5 from the previous kerb close. Warehouse stocks fell a net 175 tonnes to 254,175 tonnes.
Lead traded at $2,167, up $16, with a 1,875-tonne fall in stocks to 326,875 tonnes. Tightness remains acute - cash/threes stood around $16.50/17.50 backwardation, with the Nov/Dec rate some $17.00 premium.
In others, zinc rose $17 to $1,951 - stocks dropped 650 tonnes to 1,154,700 tonnes. Nickel business at $16,224 was up $174 although inventories climbed 498 tonnes to a new 21-month high of 133,602 tonnes.
Tin gained $100 to $20,500, while stocks were unchanged at 11,485 tonnes. Steel billet was steady at $335/345 - stocks recorded their regular decline, down 1,560 tonnes at 92,365 tonnes.
In the minors, cobalt at $22,750/24,000 was around contract lows, while molybdenum was steadier at $24,000/24,500.
(Editing by Mark Shaw)