Banner Day for Base Metals
Sep 13th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were all solidly in positive territory on Friday. Copper rose from the pre-dawn hours straight through to mid-morning, peaking at $3.27, then tailed off but still finished with a big gain at $3.2379/lb., up nearly 8½ cents.
Nickel was up all day, save for a quick downdraught in the afternoon that was quickly erased, closing near its intraday high at $8.6833/lb., up more than 38 cents. Zinc had a very steep rise just after New York opened and held near its highs, ending at $0.8378/lb., up 4¼ cents. Aluminum had a good day, gaining almost 2¼ cents, to $1.1843/lb., while lead soared, adding more than 4 cents, to $0.8683/lb.
Copper jumped the most in three weeks as the weaker dollar made commodities more attractive for their hedge value. Gains were pretty much across the board, with the Reuters/Jefferies CRB index of 19 commodities rising as much as 1.7%, a big turnaround after 10 losing session.
Some bottom feeders also stepped up to buy, feeling that with copper at an 8½-week low, it had been oversold.
On the supply side, inventories monitored by the LME fell by 1,050 metric tons, to 203,075 tons.
Some were also nervous after Freeport (NYSE:FCX), the world’s biggest publicly traded copper producer, reported explosions near its giant open-pit Grasberg mine in Indonesia. Operations were running normally after the blasts, a spokesman said, but gave no indication as to whether the explosions were accidental or deliberate.
And (NYSE:RTP) Rio Tinto’s chief executive for copper sees tight supply for copper for years to come.
“We firmly believe we will continue to see higher levels of disruption than we have seen in the past,” Rio’s Bret Clayton said.
Clayton noted the small-scale pit wall collapse reported at Freeport’s Grasberg mine earlier in the week. He said such disruptions were becoming more common and resulted from technical issues as mines move deeper into the earth.
“We’ve seen much higher levels of disruption — 4-6 per cent compared with the historical average of 2-4 per cent,” Clayton said. “And we think this is going to continue to impact on the supply response in what is a very tight market.”
Source: Banner Day for Base Metals
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