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London Metal Exchange (LME) copper ended little changed after earlier volatility on Tuesday, dealers said. The market has established a loose range between $3,800 and $4,000 a tonne recently in illiquid conditions that were exacerbated ahead of the LME annual dinner.

Three months prices closed at $3,905, down $7 from Monday's kerb finish, after bouncing between $3,940 and $3,853 in electronic trading.

"In the coming session there may be some liquidation but it will probably be staggered as the fundamentals remain as they are - tight," a dealer said.

"Trading was a little cagey today given the quiet conditions, although a strong advance or a sell-off was unlikely with the LME dinner tonight."

Prices edged higher in late trading as investor confidence grew in industrial metals consumption after a better-than-expected report on US manufacturing in October.

LME stocks remain tight at around 65,000 tonnes, while the premium commanded for prompt delivery was around $170 a tonne.

November traded options expire on Wednesday, which could cause volatility if there were sharp price moves from copper, dealers said.

"The strikes to watch are $3,800 and $4,200, while the November date is around $4,060, so if prices hold it will go off without any drama," another dealer said.

On Tuesday Codelco CEO Juan Villarzu told Reuters that a copper surplus would grow to 300,000 tonnes in 2006, while cash copper prices would fall over the next three years to a more sustainable $2,200-2,400.

Aluminium was at $1,980, down $4, while nickel was at $11,650, down $350.

Zinc was at $1,531, down $15, while lead ended at $937, from $963. Tin was at $6,300, up $20.

Copyright Reuters, 2005


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