The base metals were nearly all in the red on Monday. Copper sagged during the pre-dawn hours, rallied through the morning, but then backed off again late to finish at $1.6233/lb., down nearly 3¾ cents.

Nickel had an up and down day, with the biggest down coming in the early afternoon, driving it to a close at $4.3114/lb., down more than 6½ cents. Zinc eased, ending at $0.5381/lb., down two-thirds of a cent. Aluminum held up through the morning, then plunged to its intraday low of $0.5643/lb., down a penny, while lead bucked the trend by rising steadily to $0.5565/lb., almost a penny and a half.

Copper fell off the most in two weeks, as global economic concerns ruled the day once again.

The message over the weekend from the World Bank was particularly gloomy. The bank predicted that the global economy will shrink this year for the first time since World War II. Trade is projected to decline by the most in 80 years, and industrial production could fall off by as much as 15%.

“Copper finds itself testing the low bounds of what we estimate to be the new range this morning as renewed economic doom and gloom takes over sentiment,” said Alex Heath, of RBC Capital Markets in London.

In the meantime, though, the supply side continues to shift. Inventories monitored by the LME fell 3,325 metric tons yesterday, to 518,700 tons. That followed a 3.7% drop last week, and stocks have now declined for eight straight days, the longest slide since April 1.

“The fact that warehouse stocks keep declining is a positive for copper and gives people some hope that demand is coming back in,” said Donald Selkin, chief market strategist at National Securities Corp. in New York. “It’s helping to push copper to a higher trading range.”

South Korea, Asia’s third-largest base metal buyer, isn’t waiting for lower prices any longer, and plans to boost its strategic aluminum and copper reserves by 46% and 23% respectively this year, in anticipation of higher prices when demand kicks back in.

“This year offers the best opportunity to achieve value for money in stockpiling. We plan to actively purchase in the first half as metal prices are likely to gradually recover later this year,” said Kwon Tae-kyun, of the state-run Public Procurement Service.

In company news, Rio Tinto (NYSE:RTP) says it’s not planning to delay construction of the Oyu Tolgoi $3 billion copper and gold mining project in Mongolia, one of the world’s biggest deposits, denying media reports it was considering such a move with joint venture partner Ivanhoe Mines (NYSE:IVN). The Mongolian government is expected to sign a long-awaited investment agreement within days.

Source: Base Metals Stagnant