A 2,525-tonne decline in LME copper stocks gave a modest boost to that market, but the biggest early move was in nickel.
When three months nickel broke through $7,630 it triggered stops and charged up to $7,720, a gain of $105 over Monday's kerb close. We saw some commission house stop-loss buying at $7,630, one trader said.
The rally ignored a rise in nickel stocks of 384 tonnes.
Nickel's strength has caught the market by surprise, which had been counting on soft fundamentals to pressure prices.
This move is going against the fundamental view that the market is weak, said analyst William Adams of broker Rudolf Wolff. But if there has been some disruption in CIS production or exports, then with the West dependent on the CIS for 17 per cent of its supply, it's not surprising the market feels vulnerable, he added in a commentary.
The clearance of $7,660 should target $7,780, and may trigger enough short-covering to challenge $8,000, Adams said.
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Copper edged higher after the stocks fall, last trading at $1,933, up $6 from Monday's close. The inventory decline was mildly supportive since expectations had ranged from 5,000 tonnes either way, traders said.
The market was still wary of copper, which had a tendency for erratic moves, but it seemed to be attempting to build a base above support levels above $1,910/20 support, they added.
Spreads were little changed from Monday evening, with cash/threes indicated at a $13/17 backwardation.
Aluminium was little changed at $1,476, down $1 from Monday, after stocks rose by 4,700 tonnes.
One trader said the market has seen general trade buying around support of $1,470 while another said there had been a bit of Chinese interest under current prices.
Tin stocks rose a marginal 50 tonnes but prices were a touch firmer at $6,250, up $15 from Monday.
Traders said prices were stuck in a $6,240-80 range, with Far East selling coming in on any moves higher while European buying and US forward interest supported the lower end.
The market would have difficulty breaking above $6,300.
I have plenty of selling in my book at $6,300 and even more at $6,350 and 6,400, one trader said.
Zinc was barely easier at $1,029, down $4, after stocks fell 2,850 tonnes while lead was indicated at $813/15 versus $810 after stocks declined by 125 tonnes.
Alloy was indicated weaker at $1,275/80 compared to $1,280/85. Stocks fell 240 tonnes.