Base Metals In The Red
Jan 28th, 2009 | By Doug Casey | Category: Financial NewsThe base metals all fell back into the red on Tuesday. Copper peaked in the late pre-dawn hours and it was all downhill from there, as it barely came off its intraday lows late to finish at $1.4483/lb., down 9¼ cents.
Nickel fell until the New York open, but staged a strong rally through the rest of the day that returned it almost to break-even, closing at $5.0296/lb., down less than 3 cents. Zinc slumped all day, ending at its intraday low of $0.5006/lb., down 2 cents. Aluminum had a weak day, shedding nearly 2 cents, to $0.5924/lb., while lead dropped a penny and two-thirds, to $0.5079/lb.
Copper pointed the way for the industrial metals to move lower, as the brief euphoria stemming from Monday’s housing numbers evaporated, and stockpiles which continue to swell dominated the market.
Copper inventories monitored by the LME followed up Monday’s gain of nearly 15,000 metric tons by rocketing higher by another 12,375 tons yesterday, to 451,800 tons, a fresh 61-month high.
The inventory gluts are “no doubt weighing on sentiment,” wrote Edward Meir, of MF Global (NYSE:MF). “We still seem to be firmly mired in recessionary conditions.”
Yesterday’s sobering number from the Conference Board on consumer confidence also did market sentiment no good.
“Things really need to start to fall into place for the economy before we can start to see any real kind of turnaround for copper,” said Michael Gross, an OptionSellers.com analyst in Tampa, Florida. “Prices will continue to languish.”
In company news, Freeport-McMoRan followed Monday’s red ink hemorrhage by announcing that production from its Morenci copper mine in Arizona, already reduced, will be cut back even further.
But Platts injected a smidgeon of optimism, writing that, “Spot premiums for copper cathode imported into China from Japan have inched up … this month, which may suggest a demand recovery in China, Japanese smelter and trade sources said.”
Platts went on to say that, the “sources said buying interest from Chinese traders and consumers increased in January,” and “there was a constant flow of inquiries throughout the month, although this week was quiet as Chinese businesses are closed for Lunar New Year holidays.”
Source: Base Metals In The Red
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