Base Metals in the Red
Aug 29th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were all in the red on Thursday. Copper fought a seesaw battle all day, with the ayes having the final word but not enough of one to overcome the nays, as it finished at $3.4757/lb., down 2¾ cents.
Nickel sagged in the pre-dawn hours, then traded sideways in New York to close at $9.1922/lb., down 15 1/3 cents. Zinc was up and down all day, just coming off its lows late to end at $0.8042/lb., down a penny. Aluminum held up until mid-morning but then dropped to $1.2153/lb., down a penny and two-thirds, while lead gave back some of Wednesday’s gains, shedding more than three-quarters of a cent, to $0.926/lb.
Copper declined as traders’ concerns about rising stockpiles overrode any other considerations.
Inventories monitored by the LME shot up by 2,200 metric tons, or 1.3%, to 170,500 tons yesterday. That’s the highest level since February 6. Copper stocks have gained 19% this month.
Prices were also weighed down by a report from RBC Capital Markets, which speculated that copper stockpiles in Shanghai will rise about 6,000 tons. China is the world’s biggest buyer of metal, and the expectation had been that its consumption was going to increase after the Olympics.
There is “significant demand weakness” out there, said Catherine Virga, an analyst at CPM Group in New York, after signs this past week that the U.S. economic slowdown is spreading to the eurozone.
Nevertheless, there are also supply concerns. Chile, the world’s largest copper producer, said its production of the metal fell 5.5% in July, year over year.
Source: Base Metals in the Red
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