Base metals are little changed at the close of London Metal Exchange (LME), consolidating in lacklustre trade as investors weighed weak European growth data against a better-than-expected US labour report.
At the PM kerb close on Thursay, the LME's flagship three-month copper contract was trading at $US8,237 a metric ton, up just 0.1 per cent on the day.
Investors were faced with a mixed bag of economic data on Thursday. While the euro-zone economy plunged at its fastest clip in nearly four years last quarter, US jobless claims were lower than expected last week.
Gross domestic product (GDP) in the euro zone fell 0.6 per cent in the fourth quarter compared with the third, according to a Eurostat report. Economists had expected a 0.4 per cent drop.
Initial jobless claims in the US, meanwhile, decreased by 27,000 to a seasonally adjusted 341,000 in the week ended February 9, against expectations of a reading of 360,0000.
Faced with mixed macroeconomic signals, "the markets are taking a breather after recent gains across the board," said VTB Capital analyst Andrey Kryuchenkov.
A lack of buying activity from Asia, where Chinese markets remain closed for the Lunar New Year holiday, is also capping gains, he added.
Nickel lagged the base metal complex Thursday, closing 0.7 per cent lower on the day at $US18,255/ton.
Having risen in tandem with other industrial metals since November, nickel may struggle for further upward momentum in the short-term amid sluggish demand growth in the stainless steel sector-a major source of nickel demand-and increasing supply of the nickel to the market, said Credit Suisse.
"With the broader stainless sector last year suffering the effects of sluggish demand growth, overcapacity and inventory accumulation, we believe additional price support is unlikely to emerge strongly in the near term," the bank said.
Nickel prices are unlikely to drop significantly, however, since lower prices should prompt production cut-backs, the bank said.
"While we expect an ebbing of nickel prices as new supply enters the market, we see this as a transient feature. Poor operating performance has meant higher marginal costs of production than promoters and developers have postulated, a characteristic that has marred the supply sector for many years," Credit Suisse said.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 8237.0-8242.0 Up 11.5
Lead 2406.5-2407.0 Up 4.5
Zinc 2189.0-2190.0 Dn 6
Aluminum 2156.0-2157.0 Up 14
Nickel 18255.0-18260.0 Dn 120
Tin 24825.0-24830.0 Dn 25
Aluminum Alloy 1910.0-1920.0 Up 11
Aluminum Alloy-NASAAC 1975.0-1985.0 Up 15