The base metals were all mired in the red again on Wednesday. Copper nosedived from the pre-dawn hours to the open of the New York session, bottoming at $3.69 before cutting about half its losses to finish at $3.7464/lb., down 5 1/3 cents.

Nickel sank steadily through most of the day, closing at $10.2315/lb., down almost 47 cents. Zinc hit the skids, just coming off its lows in the late morning to end at $0.9475/lb., down nearly a penny and three-quarters. Aluminum also halved its losses, winding up at $1.3221/lb., down more than a penny and three-quarters, while lead was down modestly, dropping a half-penny to $0.907/lb.

Copper slid following announcement of a steep rise in stockpiles, taken as a potential signal that demand may be waning. Inventories monitored by the LME were up by 1,400 metric tons yesterday, to 125,800 tons. That marked the highest level since March 13.

But are we entering a full-bore correction?

Metals analyst William Adams, of Basemetals.com, isn’t quick to jump to that conclusion. “In the absence of fresh supply disruptions in the base metals, the path of least resistance seems to have been to the downside recently, however dips have remained well supported as bargain hunters have stepped in to take advantage of these lower price levels,” he said.

In the short term, however, “There is nothing out there to be really bullish about,” said Adam Rowley of Macquarie Bank. “Nickel was looking like it might tighten up a bit, but the stainless steel production cuts that have been announced in China have really put a lid on that,” Rowley added.

And Mining Journal Online reported that, “Low refined nickel prices and stricter government enforcement of environmental standards have cut into profits for Chinese nickel pig iron producers, forcing some to suspend production.”

In company news, the day after Rio Tinto announced it was suing the Indonesian government over the issuance of mining permits to local firms, Rio said that the Sulawesi project at the center of its efforts in the country is a tier-one opportunity.

Rio Tinto Copper CEO Bret Clayton called the 162-million tonne Sulawesi nickel deposit “a substantial resource” that will provide an attractive entry for Rio Tinto into a new metal. Clayton added that “in ten years’ time, Rio Tinto could rank among the top ten nickel producers globally.”

Source: Base Metals Beaten Down Some More