Base Metals All in Positive Territory
Posted on: May 29th, 2009 | By Doug Casey | Filed under Gold Market
The base metals were all luxuriating in positive territory on Thursday. Copper pushed steadily higher from the early pre-dawn hours straight through the day, finishing just off its intraday highs at $2.129/lb., up 5 1/3 cents.
Nickel followed copper to a T, busting back over the $6 mark and closing right at its intraday high of $6.1182/lb., up more than 20 cents. Zinc had some ups and downs but managed to slough off its early weakness and end at $0.6581/lb., up more than a penny. Aluminum was modestly higher, adding just under a half-cent, to $0.624/lb., while lead completed a strong day, tacking on over a penny and three-quarters, to $0.6687/lb.
Copper led the industrials higher, as traders grasped at the latest positive straw, the durable goods report, as evidence that the economy is brightening.
“The report this morning was pretty good for the economic outlook,” said Michael K. Smith, of T&K Futures & Options in Port St. Lucie, Florida. But he might have been thinking of the desperation of the environment when he added, “The market is looking for a potential bottom in the economy and all you need is a little bit of good news to send copper higher.”
The base metals also got a boost from the rally in equities and the weakening dollar, and there was some “spill-over support from stronger precious metals complex,” said John Gross, publisher of the Copper Journal.
And stockpile data provided the support to which the market is becoming accustomed. Copper inventories monitored by the LME declined 2,150 metric tons yesterday, to 317,125 tons. That’s the lowest level since last December 15.
But China is a bit murky. Continued Chinese buying would support copper prices, said Charles Kernot, of Evolution Securities in London. China increased imports of copper and aluminum to a record in April.
However, Lili Shi, an independent Chinese scrap metal consultant, warned that, “High levels of Chinese copper scrap imports not a sign of healthy consumption and might present risks if global demand continues to be hit by the financial crisis.”
Source: Base Metals All in Positive Territory
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