Base Metals Lazy
Dec 16th, 2008 | By Doug Casey | Category: Financial NewsThe base metals were mixed on Monday. Copper was up during the pre-dawn hours, peaking at $1.47, but declined all through the day, barely coming off its lows to finish at $1.3912/lb., down 3 cents from Friday.
Nickel slumped straight through, closing at its intraday low of $4.4913/lb., down more than 18 cents. Zinc edged higher, ending at $0.4807/lb., up two-thirds of a cent. Aluminum fell off, giving up a penny and a quarter, to $0.6506/lb., while lead was little changed, adding a tenth of a cent, to $0.4574/lb.
Copper slipped lower on a day of lackluster trading in the industrial metals, as falling oil and equities beat down whatever optimism existed in the early hours.
Also factoring in were the manufacturing slump in New York state, sagging U.S. industrial production, and serious weakness in China’s factory output growth.
“The economy is bad, and we’re not seeing any light at the end of the tunnel,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “There will be some rough months ahead.”
And the value of copper exports from top producer Chile fell 32% in November, compared with November 2007. Copper demand will stagnate next year because of the global recession, and the price of the metal will be “depressed” in 2009, according to Jose Pablo Arellano CEO of Chile’s Codelco, the world’s top producer.
As usual, the stockpile situation provided support only in the negative. Inventories monitored by the LME shot up by 8,000 metric tons, to 314,825 tons, yesterday.
Technical analysts said that the market should expect several weeks of sideways action, but that levels should remain above the 3½-year low hit on December 5, as many players wind down their trades for the year.
And the CFO of Brazilian mining giant Vale believes that the high cost of borrowing is likely to hamper mining firms’ ability to pursue takeovers in the sector.
“Our sector will see less wonderful days for mergers and acquisitions,” said Vale’s Fabio Barbosa.
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