Base metals on the London Metal Exchange (LME) have closed mostly a touch lower as a stronger US dollar and lingering global economic and political concerns weighed upon sentiment for the risk appetite-related metals.
At the close of open-outcry trading on Monday, LME three-month copper was 0.3 per cent higher on Friday's settlement price at $US7,724 a metric ton.
LME three-month zinc was down 0.9 per cent at $US2,002/ton after a sharp slide in recent sessions saw the metal briefly fall below the $2,000/ton mark.
"Sentiment and LME prices remained weak at the start of the new week following a fresh round of measures from Beijing aimed at cooling the hotspots in the Chinese property sector," noted Sucden Financial analysts.
China is the largest consumer of industrial metals, used widely throughout the construction sector. The measures include higher downpayments and mortgage rates in cities where house prices have risen rapidly.
"Fears that demand for industrial commodities may be affected as a result kept investors cautious -- regional equity markets were also under pressure," Sucden added.
With risk-appetite dented, a stronger safe-haven US dollar continued to weigh upon base metal prices, damping the appeal of the dollar-denominated complex to other currency holders. Also adding to the negative sentiment was the US budget sequester.
"In light of the mixed macro readings we have seen over the past 72 hours and the poor technicals evident across most base metal charts, we suspect we likely will work somewhat lower over the course of the week," said INTL FCStone analyst Ed Meir in a note Monday.
"In addition, the US equity rally may stall here, as averages near their all-time highs, increasing the odds of a short-term pullback that could spill over into commodities.
"On top of all this, we have lingering political uncertainties on both sides of the Atlantic, with budget talks in Washington and the Italian stalemate still hovering overhead," he added.
Although signs of progress in either one of these two situations would surely spark an upside reversal in base metals, said Meir, he expects this would be gradual.
European finance ministers meet this week and a number of central banks are due to make interest rate decisions.
Friday market participants will be looking to the US nonfarm payroll figures for directional cues.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Friday PM kerb
Copper 7724.0-7725.0 Up 24
Lead 2215.0-2216.0 Dn 28
Zinc 2002.0-2003.0 Dn 18
Aluminum 1973.0-1974.0 Dn 1.5
Nickel 16475.0-16500.0 Dn 130
Tin 23370.0-23375.0 Up 220
Aluminum Alloy 1855.0-1860.0 Up 25
Aluminum Alloy-NASAAC 1840.0-1850.0 No change