Base Metals Mixed
Apr 22nd, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mixed on Tuesday. Copper was down sharply in the early pre-dawn hours and lumbered along below the $2 mark until mid-morning, when buyers emerged to push it back to a finish at $2.0338/lb., down 2¾ cents.
Nickel was also down early, but failed to rally much, closing at $5.2012/lb., down 27½ cents. Zinc’s late surge carried it almost to break-even, ending at $0.6491/lb., down less than two-tenths of a cent. Aluminum did make it back into positive territory, adding just short of a penny, to $0.6406/lb., while lead also showed some spunk, tacking on two-thirds of a cent, to $0.6654/lb.
Copper set the tone for the industrial metals, which all featured late morning rallies tied to a turnaround in equities, although it was unable to reach green numbers as gloomy earnings reports weighed on the market.
Both stocks and the base metals got a boost from Treasury Secretary Timothy Geithner, who reassured Americans yesterday that the “vast majority” of the nation’s banks have more capital than needed, easing concern about the outlook for financial companies.
However, Shanghai copper went limit down on the day, falling the maximum allowable 5%, and that could signal further weakness ahead, wrote William Adams, an analyst at Basemetals.com in London.
“We would keep a firm eye on equities to see if the slide halts and on metals charts to look for signs of consolidation, which may well initially trigger some nervous bargain-hunting,” Adams said.
The stockpile situation continues to be supportive, however. Copper inventories monitored by the LME plunged again yesterday, falling by 5,025 metric tons to 457,300 tons. And canceled warrants — stocks earmarked for delivery — rose to 72,375 tons from 68,325 tons on Monday.
In company news, beleaguered miner Teck Cominco (NYSE:TCK) caught a break, as its lenders have agreed to defer $4.4 billion in debt payments due in 2009, giving Teck some breathing room in its attempt to pay down debt from the purchase of Fording Canadian Coal Trust. Investors applauded, driving Teck’s shares up by 30%.
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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.