Base Metals Edge Lower
Mar 12th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mostly in the red on Wednesday. Copper slumped from the late pre-dawn hours straight through New York, with only a small late uptick near the finish at $1.6153/lb., down more than 4¾ cents.
Nickel was in positive territory just before New York opened, but then it fell steadily to close at its intraday low of $4.322/lb., down 5½ cents. Zinc had a lot of ups and downs, but ended at $0.5442/lb., down better than a penny. Aluminum was well in the green into the afternoon, but then slid to $0.5838/lb., up only a quarter-cent, while lead slumped by more than three-quarters of a cent, to $0.565/lb.
Copper failed to follow up on its nice Tuesday rally, despite the widely-anticipated strong movement higher in Chinese imports.
Traders were apparently muddled by the mixed data out of China. On the one hand, the country’s total copper imports surged 41.5% to a record 329,000 metric tons in February, exceeding expectations on state-backed strategic buying and stronger in-country prices.
Analysts had predicted a boost after the arbitrage for importing copper from London Metal Exchange warehouses gapped wide on restocking by end-users and repairs at some Chinese smelters. But the size of the increase surprised to the upside.
On the other hand, though, China’s overall trade suffered a major smackdown. February exports dropped 25.7% in February, year-over-year, while imports were down 24.1%, the General Administration of Customs said.
That led to a shocking collapse in China’s trade surplus, to a three-year low of $4.84 billion in February, from $39.1 billion in January, vs. expectations of a slide only to $27.3 billion.
“The collapse in exports is yet another indication that economic activity in China is slowing, despite some tentative signs to the contrary,” wrote Edward Meir, of MF Global (NYSE:MF).
In supply news, London stocks continued to drop yesterday, as inventories monitored by the LME fell 10,150 metric tons, to 501,875 tons.
Looking ahead with mild optimism, “Global copper prices will trade between $1.50 and $1.80 per pound this year, underpinned by Chinese buying and lower production in major mining centers such as Chile,” said CESCO Executive Director Juan Carlos Guajardo at Reuters’ Global Mining and Steel Summit.
Source: Base Metals Edge Lower
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