The base metals were mixed on Wednesday. Copper declined from the pre-dawn hours to mid-morning, but then rallied sharply through the rest of the day, finishing at its intraday high of $1.7383/lb., up 3¾ cents.

Nickel also turned around after mid-morning, but failed to regain positive territory, closing at $4.4754/lb., down nearly 7½ cents. Zinc followed a similar path, ending at $0.5451/lb., down a half-cent. Aluminum added almost a penny and a quarter, to $0.6195/lb., while lead slumped, dropping nearly a half-cent, to $0.5962/lb.

Copper recouped its early losses and pushed well into the green after the Fed’s announcement generated some positive feelings.

“I think the fact that they are starting to buy long treasuries to push down long-term interest rates caused the (copper) market to react,” said Edward Meir, of MF Global (NYSE:MF).

“The Fed’s Treasury purchases will help copper on the demand side by helping to make money cheaper,” Meir added.

Action on the stockpile front continued to be slow. Inventories monitored by the LME rose by 625 metric tons yesterday, to 495,150 tons, anemic compared to recent changes that have routinely been in the thousands of tons.

Traders also had their eyes on China where, as Bloomberg reported, “the stock market rose to the highest in almost four weeks, led by Jiangxi Copper and other metal producers, on the expectation that higher commodity prices will help boost profits.

“ ‘Copper prices have stabilized,’ said Zhao Zifeng, a fund manager at China International Fund Management Co. in Shanghai, which manages the equivalent of $10.2 billion. ‘Investors are buying metal stocks as the state purchase has bolstered investors’ confidence that prices would be on an upward track.’

“Copper purchases by China to boost stockpiles may flip the global market from surplus into deficit this year, boosting prices already underpinned by stimulus spending, according to China International Capital Corp., the nation’s biggest investment bank.”

Source: Base Metals Mixed