London 11/07/2012 - Base metals were largely subdued during Wednesday LME premarket trading, mired in the sideways ranges that have become narrower in recent days and which reflect the lack of activity or clearer direction.
In the short term, the market will ebb and flow ahead of Chinese second-quarter GDP figures at the end of the week, with currency shifts seen as the main driver.
"Low conviction and a general malaise are settling over the markets, as rallies seem destined to peter out and data continues to soften," a trader said.
The euro was managing to hold above yesterday's two-year lows of 1.2233 against the dollar but at 1.2280 was still soggy. Equity markets were lower in Europe.
Underwhelming global economic prospects continue to be the main drag on the metals complex, with the eurozone's troubles to the forefront, as well as the pressure from recent signals and data showing that the US and China are not performing brightly.
The key data input this week will be China's second-quarter GDP figure. The country's June trade data yesterday raised concerns over the strength of strength of domestic demand, with imports slowing. Sub-par GDP figures could trigger further monetary easing - China has softened interest rates twice recently.
"The economic outlook is expected to weigh on demand and in the absence of supply-side cuts we feel the path of least resistance is to the downside and that rallies are likely to remain short-lived," William Adams of FastMarkets said.
Meanwhile, US data releases scheduled today include the May trade balance and wholesale inventory figures and the minutes from the US Federal Reserve's June FOMC meeting.
COPPER RESILIENT, SHORT-TERM SUPPORT SEEN
Copper, having earlier bounced off short-term support near $7,480, traded at $7,520 per tonne, up $30 from Tuesday. The market is holding above recent two-week lows around $7,480 - a triple-bottom is emerging on short-term charts there.
Warehouse inventories declined a net 925 tonnes to 252,350 tonnes and have now fallen on seven out of the last eight days.
Aluminium gained $3 to $1,915, with a regular inventory decline seen - stocks fell 11,800 tonnes to 4,811,050 tonnes.
Zinc traded at $1,844, up $14, after stocks dropped 2,575 tonnes to 983,075 tonnes. The downtrend in inventories is likely to continue given the high level of cancelled warrants, which are currently at 195,250 tonnes.
In other metals, nickel dipped briefly to equal Tuesday's one-month low of $16,050 and then traded at $16,146, just above the previous $16,055. Inventories were up 522 tonnes at 105,528 tonnes, a one-month high.
Lead business at $1,876 was up a light $1.50, while inventories were down 300 tonnes at 346,525 tonnes. Tin traded at $18,690, a $65 loss, with a modest 10-tonne stock fall seen.
Steel billet held stable at $400/420, while in the minor metals cobalt was quoted at $27,300/28,500 and molybdenum was neglected.
(Editing by Mark Shaw)