Jan 30 (Reuters) -
Prices of most nonferrous metals declined on Tuesday as China optimism faded, while investors and traders exercised caution ahead of a key rate decision in the United States.
Three-month copper on the London Metal Exchange eased 0.2% to $8,545 per metric ton by 0558 GMT, and the most-traded March copper contract on the Shanghai Futures Exchange was nearly flat at 68,990 yuan ($9,612.38) a ton.
Most metals gained last week on hopes of better demand in top consumer China after authorities introduced and pledged some measures to support the economy.
"The trend for metals is down due to a lack of China's physical demand," said a trader, adding that the Chinese stimulus helped lift prices but did not break a downward trend.
"So we still get people selling here to push things back down to longer-term trend," the trader added.
COMEX data showed net short positions on copper leapt to the highest since March 2020 at 30,839 contracts by Jan. 23.
Sentiment is still bearish for copper despite increasing tightness in mine output starting to
impact
smelters in China, analysts at Amalgamated Metal Trading said in a note.
The U.S. Federal Reserve is expected to hold interest rates this week, but the focus is on the tone that Chair Jerome Powell will strike at a Wednesday press conference and hints of potential rate cuts in the near future.
LME aluminium declined 0.6% to $2,251.50 a metric ton, nickel dropped 0.9% to $16,295, lead slipped 0.6% to $2,159.50 and tin eased 0.4% to $26,235, while zinc was nearly unchanged at $2,553.
SHFE aluminium declined 0.6% to 18,965 yuan a metric ton, nickel dropped 2.7% to 126,920 yuan, zinc lost 0.6% to 21,285 yuan, lead eased 0.3% to 16,200 yuan and tin shed 1.1% to 218,690 yuan.
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($1 = 7.1772 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Dhanya Ann Thoppil and Eileen Soreng)
