The base metals were mostly lower on Tuesday. Copper was in the green until late in the pre-dawn hours, then fell into the red and never quite recovered, finishing at $1.6362/lb., down nearly 2½ cents.

Nickel declined from the pre-dawn hours until the noon hour, rallied into the afternoon but not enough to take it back to break-even as it closed at $4.5888/lb., down just under 7 cents. Zinc pushed slowly northward throughout the day, ending just off its intraday high at $0.5603/lb., up more than three-quarters of a cent. Aluminum peaked in the late pre-dawn hours, then dropped straight through the day, just coming off its intraday low at $0.7935/lb., down a third of a cent, while lead traded flat until the afternoon, during which it lost a penny and a quarter, to $0.5295/lb.

Copper’s modest uptrend failed to hold, as traders’ pessimism evidently reasserted itself and they sold into the one-week high established a day earlier.

Obviously, “The boost to sentiment by the Citigroup news proved to be short-lived,” said Wang Lei, an analyst at Haitong Futures Co. in Shanghai. “Fundamentals are still bearish for industrial metals as the global economy slows.”

The volatility in the stock market also factored in.

“As soon as the stock indices turned around, we saw the turnaround in the metals. The correlation between the two is getting tighter and tighter,” said Rob Kurzatkowski futures analyst with OptionsXpress (NASDAQ:OXPS) in Chicago. “Barring the unforeseen, it should closely trail with what the equity markets are doing.”

Also weighing on the market was a World Bank forecast for 2009 gross domestic product (GDP) growth in China, the world’s biggest consumer of industrial metals, cutting it to 7.5%, which would be the slowest pace since 1990.

Zinc managed to hold up after OZ Minerals Ltd., the world’s second-largest zinc mining company, said it will defer $318 million in project spending and cut output because of turmoil in debt and metal markets. The Melbourne-based company will also announced it will slash production at its largest zinc mine by 20,000 tons.

In major company news, BHP Billiton (NYSE:BHP) announced it is abandoning its attempt to take over rival Rio Tinto. Billiton had announced the bid during the commodities boom last November, but wrapped it up in the midst of sliding prices worldwide.

One measure of how drastically things have changed is the fact that at its peak, BHP’s the all-share offer valued Rio at about $193 billion. As of yesterday, by contrast, the bid was worth little more than a third of that, around $66 billion.

And in Antofagasta, the heart of Chile’s crucialcopper mining industry, mine workers demonstrated this week to demand government aid. Upwards of 2,500 jobs have been lost in the region as copper prices cratered.

Source: Base Metals Tread Water