Zinc lost ground on Thursday after inventories rose, highlighting an overhang of supplies that analysts say needs to be eroded before expected shortages kick in.
Nickel prices also slipped after inventories touched another record high.
Benchmark zincon the London Metal Exchange (LME) slipped 0.4 percent to $2,369.50 a tonne in official open outcry trading after hitting $2,416 on Monday and again on Tuesday, the strongest since August 2011.
Zinc prices have climbed 15 percent this year as funds have scrambled to buy on forecasts of future shortages after the closure of major mines, but many analysts say prices are overheated since tight markets have not yet formed.
"It does seem to indicate that people are asking questions about whether zinc has any further upside. We have been saying that the price has escaped the fundamentals. It's overextended and it's got a correction due," analyst Vivienne Lloyd at Macquarie in London said.
"With stocks going in to New Orleans today, that's going to diminish appetite for the upside as well."
LME zinc stocksrose 7,375 tonnes on Thursday to 655,750 tonnes after dropping by 30 percent so far this year. It was unclear yet whether this was a one-off increase or marked a halt of the declining stocks trend, Lloyd added.
NICKEL
Nickel is another metal that has seen strong gains this year on forecasts of expected shortages, but which still has healthy inventories.
The price of the metal mainly used in stainless steel slipped after LME nickel stocksrose 1,398 tonnes to a fresh record of 315,798 tonnes. Benchmark nickel failed to trade in official rings and was last bid down 1.0 percent at $18,775 a tonne.
Other LME metals were either little changed or in the red, weighed down by a slightly stronger dollar and concerns about the Chinese economy.
The International Monetary Fund said that China should lower its growth targets for next year as part of a push towards safer and more sustainable growth. It also flagged the country's property market slowdown as a cause for concern.
The world's second-largest economy accounts for around 40 percent of world refined copper demand, and China's construction sector for a large portion of its copper consumption.
"The (positive) Chinese economy story might carry into the next quarter. But the game is structural deceleration, so bad news is waiting to come around again," analyst Dominic Schnider of UBS Wealth Management in Singapore said.
The dollar hovered near a 10-month high against a basket of currencies after the U.S. Federal Reserve said on Wednesday it was in no rush to raise interest rates and data showed on Thursday that euro zone inflation fell to its lowest since the height of the financial crisis five years ago.
A stronger dollar makes dollar-priced commodities more expensive to buyers outside the United States.
LME copperdipped 0.1 percent to $7,120 a tonne in official trading after gaining around 0.5 percent in the previous session. Prices are within reach of $7,212, the July 8 peak which was in turn the highest since February.
LME aluminiumfailed to trade in official rings and was last bid down 0.1 percent at $2,020 a tonne after gaining 2 percent on Wednesday.
The London Metal Exchange's attempts to cut backlogs at warehouses with new rules are likely to be delayed again for several months after judges declined to make an immediate ruling on a case holding up the reforms.
The news helped propel cash aluminium prices to the highest against benchmark prices since December 2012.
Leadshed 0.6 percent to $2,246 a tonne in official trading while tin added 0.3 percent to $22,950.
Source: Reuters
Nickel prices also slipped after inventories touched another record high.
Benchmark zinc
Zinc prices have climbed 15 percent this year as funds have scrambled to buy on forecasts of future shortages after the closure of major mines, but many analysts say prices are overheated since tight markets have not yet formed.
"It does seem to indicate that people are asking questions about whether zinc has any further upside. We have been saying that the price has escaped the fundamentals. It's overextended and it's got a correction due," analyst Vivienne Lloyd at Macquarie in London said.
"With stocks going in to New Orleans today, that's going to diminish appetite for the upside as well."
LME zinc stocks
NICKEL
Nickel is another metal that has seen strong gains this year on forecasts of expected shortages, but which still has healthy inventories.
The price of the metal mainly used in stainless steel slipped after LME nickel stocks
Other LME metals were either little changed or in the red, weighed down by a slightly stronger dollar and concerns about the Chinese economy.
The International Monetary Fund said that China should lower its growth targets for next year as part of a push towards safer and more sustainable growth. It also flagged the country's property market slowdown as a cause for concern.
The world's second-largest economy accounts for around 40 percent of world refined copper demand, and China's construction sector for a large portion of its copper consumption.
"The (positive) Chinese economy story might carry into the next quarter. But the game is structural deceleration, so bad news is waiting to come around again," analyst Dominic Schnider of UBS Wealth Management in Singapore said.
The dollar hovered near a 10-month high against a basket of currencies after the U.S. Federal Reserve said on Wednesday it was in no rush to raise interest rates and data showed on Thursday that euro zone inflation fell to its lowest since the height of the financial crisis five years ago.
A stronger dollar makes dollar-priced commodities more expensive to buyers outside the United States.
LME copper
LME aluminium
The London Metal Exchange's attempts to cut backlogs at warehouses with new rules are likely to be delayed again for several months after judges declined to make an immediate ruling on a case holding up the reforms.
The news helped propel cash aluminium prices to the highest against benchmark prices since December 2012.
Lead
