Base Metals Little Changed
Mar 13th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mixed on Thursday. Copper was off from the pre-dawn hours to the New York open, but then rallied through most of the day to finish at $1.6214/lb., up a half-cent.
Nickel sank through the day, just coming off its intraday low late to close at $4.2411/lb., down more than 8 cents. Zinc followed copper down and then up, but failed to regain the green at $0.5411/lb., down a third of a cent. Aluminum had a good day, adding a penny to $0.5935/lb., while lead slumped, dropping nearly a penny, to $0.5565/lb.
Copper pared its early losses and managed to find positive territory late in the day, as it got a boost from rising equities and oil, but some analysts think that a pair of rose-colored glasses may be involved.
“Copper and oil do tend to move together as benchmarks for the economy,” said Gijsbert Groenewegen, of Gold Arrow Capital Management in New York. “People are clinging to any sign of stabilization.”
Groenewegen added that, “It’s going to be much worse than what people are hoping for … As soon as anybody looks at what is really happening in China and elsewhere, they’ll see copper is going to go lower.”
Stockpile numbers served as a brake on any major increase in price. Inventories monitored by the LME rose 2450 metric tons yesterday, to 504,325 tons, reversing two weeks of declines.
Also hurting was word out of China that that country’s annual industrial output growth slowed to 3.8% in January and February, as opposed to 5.7% in December, according to the National Bureau of Statistics.
And China’s steel products exports in February hit a 52-month low of 1.56 million tons, down 62% from the same period last year, and 18% from January, according to customs data released yesterday.
But all the gloom could dissipate as a continued surge in Chinese bank lending in February is spurring optimism that the economy could soon rebound.
“[We see] Chinese industrial activity picking up again as early as the second quarter,” said Patricia Mohr, commodity market specialist with Scotiabank Group.
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.