(15/04) LME MORNING - Metals mostly decline, pressured by renewed investment sales

April 15, 2011

Base metals were unable to sustain initial tentative upward moves during Wednesday LME morning trading, with most dipping as the uncertain mood that prevailed during Tuesday's sharp sell-off returned.

Prices largely headed back into the minus column, led lower by a sharp fall in copper, with selling again emerging from the systems-based investment sector, traders said.

"(In copper) a few local sell-stops were hit through $9,600. I think Goldman may have put the jitters up a few people," one said.

Sentiment, not only in the base metals, but other key commodities such as precious metals and oil, was knifed yesterday by the worsening nuclear crisis in Japan, signs of waning demand levels in China and the impact of a report by Goldman Sachs advising clients to take profits in commodities sooner rather than later.
Copper, which had been probing back towards $9,700 per tonne, fell to $9,560 at one point, before recovering amid dip buying activity to $9,640, up $10. On Monday, prices hit five-week highs of $9,944.75 and the upside objective remains a re-test of $10,000.

But inventories rose again, up a net 3,225 tonnes to 449,925 tonnes, the highest now since late-June 2010. Cancelled warrants - the metal booked for removal - declined as well after two days of increases. They were down 8.3 percent at 11,500 tonnes.