The base metals were mixed on Monday. Copper held in positive territory during the pre-dawn hours, then tacked on some more gains to mid-morning in New York, before easing through the rest of the day to finish at $2.3086/lb., up 3 2/3 cents from Friday.

Nickel was well up at mid-morning but sold off sharply from there, just pulling up out of the red late to close at $7.1002/lb., up a half-cent. Zinc declined in the pre-dawn hours, rose in early New York trading, but fell off after mid-morning to end at $0.6935/lb., down a penny. Aluminum was modestly lower, dropping less than a half-cent, to $0.7267/lb., while lead eked out a gain of less than a third of a cent, to $0.7697/lb.

Copper was a bit higher as there was little movement in the industrial metals’ prices on Monday, as “the drawdown in stockpiles is one of the fundamentals supporting the [copper] market,” said Michael Gross, of OptionsSellers.com in Tampa, Florida. Traders who follow historical price patterns bought copper, supporting the rally, Gross said, but added that concerns that demand may sink in China limited the day’s gains.

Inventories monitored by the LME skidded 1.1% yesterday, to 267,300 metric tons. It was the 37th straight session of declining stockpiles, marking the longest slide since April of 2004.

In addition, inventories recorded by the Shanghai Futures Exchange slipped 18% last week, the first drop since May. That could indicate that all the metal China has been stockpiling might begin to be drawn down.

The downside to that is, “Chinese buying of nonferrous metals has been a major crutch to these markets,” wrote John Reade, of UBS in London. Should the country discontinue importing and sell metal to domestic buyers, copper “will have fewer upside drivers in the second half,” Reade said.

And Bloomberg wrote on the subject that: “China may stop buying for reserves after purchases this year spurred price gains, business magazine Caijing reported, citing Yu Dongming, a metals industry official at the National Development and Reform Commission. The commission is the government’s top economic-planning group.

“China has bought 235,000 tons of copper, 590,000 tons of aluminum and 159,000 tons of zinc, the magazine cited Yu as saying at a conference in Beijing on June 26.”

Source: Base Metals Mixed