Base Metals Stable In Early Lme

A steady mood prevailed in the base metals markets on Tuesday during pre-market trading as bits of short covering propped up prices, but conditions were thin.

Copper was hovering on either side of the psychological $2,000 level after barrelling higher on short-covering rally during Mondays afternoon kerb.

It last traded at $1,998 versus Mondays close of $2,007. After failing on the downside at $1,950 and $1,980, the near-oversold market had been due for a bounce, traders said. But the market was not convinced about the lasting power of coppers upward momentum, with some traders predicting it would be sold down from the $2,020 area.

Zinc, meanwhile, snapped back above its psychological $1,200 level, also mostly on short covering in light volumes. The market has remained oversold with the RSI below 30 per cent, but analysts said a confirmed break above $1,220 was needed for progress. An LME stock draw of 825 tonnes was supportive after recent big inventory increases, but not enough to propel prices significantly higher.

Traders said chart-driven commission house buying provided a fillip in the aluminium market. A positive close of $1,633 on Monday may have set off some buy indicators, and a 2,300-tonne LME stock draw was helpful. (Reuters)