Base Metals All Push Higher, Getting a boost from Equities Markets
Nov 14th, 2008 | By Doug Casey | Category: Financial NewsThe base metals all had a rare close in positive territory on Thursday. Copper bottomed during the pre-dawn hours, then forged a not unbroken but steadily higher trail through the day, finishing at its intraday high of $1.6223/lb., up 3½ cents.
Nickel fell as low as $4.50 at the New York open, but about-faced and pushed almost to $5 before easing late and closing at $4.8799/lb., up 25½ cents. Zinc also featured a steady upward progression to its intraday high of $0.5318/lb., up almost 2½ cents. Aluminum had a choppy trading day but managed to push to $0.8502/lb., up a penny and a half, while lead had a very strong day, ending at its intraday high of $0.6149/lb., up nearly 5 cents.
Copper led the industrial metals on a rare concerted upswing as the slippage in the dollar made them more attractive and traders took some heart from equities markets that rebounded from dismal lows to post powerful gains on the day.
News out of China got some close scrutiny.
The Chinese reported that copper output dropped 8% on the year in October, to an eight-month low, as manufacturers cut production in response to weakening demand.
“That’s not a surprise,” said Judy Zhu, an analyst at Standard Chartered Bank in Shanghai. “We’ve heard production cuts by smelters lately and I don’t think it’s going to create tight supply in the international market because the smelters are just trying to keep their inventory in check.”
At the same time, October industrial production rose only 8.2% in China, the statistics bureau said. The year-over-year gain was smaller than any economist had forecast in a Bloomberg survey.
“There has been a significant deterioration in momentum” in Chinese production, wrote analysts at Barclays Capital in London, and that “bodes ill for metals consumption.”
Meanwhile, aluminum inventories monitored by the LME rocketed up by 44,425 metric tons yesterday, to more than 1.56 million tons, a better than 15-day global supply, and the highest level on record for the contract.
Source: Base Metals All Push Higher, Getting a boost from Equities Markets
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.