Base Metals Mixed
Feb 20th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were little changed on Thursday. Copper leapt ahead from the pre-dawn hours to mid-morning in New York, briefly popping over $1.50 before easing through the rest of the day to finish at $1.4712/lb., up 2½ cents.
Nickel followed a very similar path, closing at $4.421/lb., up 13¼ cents. Zinc was slowly and steadily up and then down, ending virtually unchanged at $0.4934/lb. Aluminum mimicked zinc, up less than a tenth of a cent at $0.587/lb., while lead tacked on just under a quarter-cent, at $0.4801/lb.
Copper managed to post positive numbers for the third session in four, as the declining dollar enhanced buying appeal for the metal.
Yes, “The weaker dollar is helping the upbeat tone in metals,” wrote Edward Meir, of MF Global (NYSE:MF). But also, “Most markets are higher in what seems to be a bounce from oversold conditions.”
Putting a cap on, though, were stockpiles’ reversal from their one-day decline. Inventories monitored by the LME advanced by 2,950 metric tons, more than wiping out Wednesday’s 1,125 ton drop, and rising to 528,250 tons.
Some analysts are beginning to see copper as having bottomed. Copper will trade from present levels to slightly higher on average in 2009, and it is likely to climb next year, said Andrey Kryuchenkov, of VTB Capital in London.
“The second quarter is crucial,” Kryuchenkov said. “If we see an industrial pick-up in demand, the picture will be slightly more optimistic.”
And Ralph Preston, of Heritage West Futures in San Diego, wrote that “a close over $1.56 is needed to embolden the bulls … Stable trade under $1.50 keeps the bears in firm control, with a close below $1.39 setting the stage for another leg down.”
In aluminum news, the China State Reserve Bureau is likely to buy another 400,000 metric tons of aluminum ingot from domestic smelters, which would “definitely support the market,” local sources said yesterday.
And Chinalco will not change its $19.5-billion investment plan in Rio Tinto (NYSE:RTP), even if a rival bid emerges, the company said.
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