Base metals mainly close lower on LME

AAP, with a staff reporter

Base metals mostly have closed lower on the London Metal Exchange (LME), dented by a lack of buying interest as top metals consumer China commenced a week-long public holiday.

At the PM kerb close on Monday, LME three-month copper was down 1.1 per cent at $US8,199 a metric ton. Tin held up the best, ending the session flat at $US24,850/ton.

"LME trading today was choppy and directionless with activity muted due to the Chinese New Year celebrations," said brokers at Sucden Financial.

As well as China, Singapore, Hong Kong, Japan, Malaysia, South Korea, Taiwan and Vietnam are closed Monday.

Activity in Asia's physical base metal markets started slowing last week and transaction volumes will likely be very low over the next few days, traders say.

China alone accounts about 40 per cent of global copper consumption.

Despite the softer tone on Monday, base metals still look well-positioned to move higher, said INTL FCStone analyst Edward Meir.

"In terms of the short-term outlook, we have been friendly to the metal markets over the last few weeks and see no reason to change our view at this point despite the current weakness," said Meir.

"The benefit of improving macro numbers, particularly from the US and China, should not be underestimated, as they will provide enough of a tail wind to push metals higher going into the balance of the first quarter."

More from Business Spectator