Base Metals Little Changed
Jun 18th, 2009 | By Doug Casey | Category: Gold MarketThe base metals all posted modest gains on Wednesday. Copper rode the rollercoaster, climbing to the late pre-dawn hours, falling steeply to the New York open, then rising just as sharply and, when all was said and done, adding less than a penny, to $2.2506/lb.
Nickel peaked in the late pre-dawn hours, traded very choppily through the day, and ended little changed at $6.7275/lb., up a penny and three-quarters. Zinc’s chart was similar to nickel’s, with a finish at $0.6951/lb., up a half-cent. Aluminum had a good day, rising to close at its intraday high of $0.7244/lb., up more than a penny and three-quarters, while lead was a bit higher at $0.7486/lb., up two-thirds of a cent.
Copper highlighted a day in which there were strong price moves in both directions, but little change in the end, as an early prolongation of the recent correction was arrested by the declining dollar.
“Ultimately the market got ahead of itself, using commodities as a hedge. Copper’s failure to react strongly to dollar weakness suggests an investor focus on weaker fundamentals,” said Bart Melek, of BMO Nesbitt Burns in Toronto.
Melek added that, “China is not enough to sustain a longer-term price rally. We need to see rest of the world show improvement.”
Stockpiles continued their long swoon, however, with copper inventories monitored by the LME falling by 1,875 metric tons yesterday, to 283,175 tons. The rapid pace of decline may have slowed recently, but the trend appears intact.
On the aluminum front, Bloomberg reported that “aluminum inventories monitored by the London Metal Exchange are locked into financial arrangements that make the supplies inaccessible to users, according to Alcoa Inc.’s Greg Wittbecker.
“The metal is tied up in so-called cash-and-carry trades … [and the] deals have tightened the market, Wittbecker said.
“ ‘At least 75 percent of the inventories are being held in long-term deals’ lasting from 90 days to a year, Wittbecker said. ‘I don’t think any metal is tied up for longer than a year.’
“Aluminum stockpiles in warehouses monitored by the LME have surged 87 percent to a record 4.36 million metric tons this year as demand slumped. Alcoa, based in New York, is the world’s biggest producer of the metal used in packaging, buildings, aircraft and automobiles.”
Source: Base Metals Little Changed
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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.