The base metals were mostly in negative territory on Wednesday. Copper pushed above $2.30 in the early pre-dawn hours, but fell below $2.22 by late morning, then rallied back a bit to finish at $2.2506/lb., down 2¼ cents.

Nickel followed copper, though it peaked a little later and came off its lows more strongly, ending at $6.5272/lb., down 4½ cents. Zinc traded listlessly, in the end dropping less than a half-cent, at $0.7018/lb. Aluminum was modestly lower, shedding a third of a cent, to $0.6981/lb., while lead bucked the general trend by tacking on two-thirds of a cent, to $0.7549/lb.

The base metals turned mostly south after Thursday’s big gains, with copper leading the sector lower as the stronger dollar lessened the metals’ appeal as an inflation hedge.

“Copper was down in a profit-taking retreat from the initial upside reaction to U.S. May payrolls data. Firmer dollar and fund money flows out of the broader commodity complex weighed on values,” said Bill O’Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

Nevertheless, that employment data helped to limit yesterday’s losses in copper, according to Frank McGhee, of Integrated Brokerage Services LLC in Chicago. The jobs report “adds to the euphoria people have, thinking that the worst is over,” McGhee said.

Stockpiles were supportive, notching another milestone as they fell below the 300,000 level for the first time since last December. Copper inventories monitored by the LME dropped by another 3,225 metric tons yesterday, to 299,975 tons.

Meanwhile, aluminum headed for its biggest weekly gain in 21 years, as metal earmarked for shipment from warehouses registered with the London Metal Exchange jumped almost 15% to 81,375 metric tons, signaling a sharp rise in demand.

“Some distributors are showing renewed buying interest on concern that they will not be prepared to meet orders when demand returns,” Deutsche Bank analysts wrote.

Source: Base Metals Mostly Lower