The base metals were mixed on Friday. Copper bottomed below $1.48 in the pre-dawn hours, but then pushed higher until the late morning, when it came off its highs to finish at $1.5752/lb., up 5½ cents. Nickel rose from the pre-dawn hours to mid-morning, trailed off, but then rallied late to close at $4.5503/lb., up 9¼ cents.

Zinc also rallied until mid-morning, but then eased for the rest of the day, ending at $0.5256/lb., down more than a third of a cent. Aluminum peaked in the pre-dawn hours but sank through the day, just coming off its intraday low at $0.7759/lb., down three-quarters of a cent, while lead followed aluminum closely, winding up with a loss of a third of a cent, at $0.5259/lb.

Copper rebounded from a fresh 3½-year low to post a day of solid gains amid a great deal of short covering.

Still, most analysts continue to view the demand situation for copper as bearish, considering the extremely weak U.S. housing sector, concern about the possibility that U.S. automakers won’t get the government bailout necessary to avert bankruptcy, and surging London stockpiles.

Inventories monitored by the LME rose again yesterday, gaining another 1,500 metric tons, to 283,125 tons. Stocks are up about 20% already in November. On the other hand, Shanghai copper stocks fell 3,797 tons, or 18%, a drawdown somewhat greater than expected, but not enough to offset rising stocks elsewhere, and a growing international surplus.

Concerning aluminum, traders are “pricing in expectations of further stock builds, which we concur with,” wrote Barclays Capital analyst Gayle Berry in London. LME aluminum levels are at their highest since December 1994.

Meanwhile, prices of nickel and zinc have fallen too low to cover costs for perhaps half of the world’s production of the metals, says Eugen Weinberg, an analyst at Frankfurt-based Commerzbank. Production cuts will help stabilize prices of industrial metals for the next three to six months and “as soon as China’s demand picks up, prices will pick up,” Weinberg believes.

In company news, Canadian mining giant Teck Cominco announced it will slash spending, suspend dividends, sell assets, and withdraw from the Petaquilla copper project in Panama in an effort to ease the debt burden generated by its acquisition of Fording Canadian Coal Trust.

But on the optimists’ side, HudBay Minerals has unveiled a plan to buy Lundin Mining Corp, in a friendly deal that “creates a new Canadian leader in mining.” To replace Teck?  We’ll see.

Source:

The base metals were mixed on Friday. Copper bottomed below $1.48 in the pre-dawn hours, but then pushed higher until the late morning, when it came off its highs to finish at $1.5752/lb., up 5½ cents. Nickel rose from the pre-dawn hours to mid-morning, trailed off, but then rallied late to close at $4.5503/lb., up 9¼ cents. Zinc also rallied until mid-morning, but then eased for the rest of the day, ending at $0.5256/lb., down more than a third of a cent. Aluminum peaked in the pre-dawn hours but sank through the day, just coming off its intraday low at $0.7759/lb., down three-quarters of a cent, while lead followed aluminum closely, winding up with a loss of a third of a cent, at $0.5259/lb.

Copper rebounded from a fresh 3½-year low to post a day of solid gains amid a great deal of short covering.

Still, most analysts continue to view the demand situation for copper as bearish, considering the extremely weak U.S. housing sector, concern about the possibility that U.S. automakers won’t get the government bailout necessary to avert bankruptcy, and surging London stockpiles.

Inventories monitored by the LME rose again yesterday, gaining another 1,500 metric tons, to 283,125 tons. Stocks are up about 20% already in November. On the other hand, Shanghai copper stocks fell 3,797 tons, or 18%, a drawdown somewhat greater than expected, but not enough to offset rising stocks elsewhere, and a growing international surplus.

Concerning aluminum, traders are “pricing in expectations of further stock builds, which we concur with,” wrote Barclays Capital analyst Gayle Berry in London. LME aluminum levels are at their highest since December 1994.

Meanwhile, prices of nickel and zinc have fallen too low to cover costs for perhaps half of the world’s production of the metals, says Eugen Weinberg, an analyst at Frankfurt-based Commerzbank. Production cuts will help stabilize prices of industrial metals for the next three to six months and “as soon as China’s demand picks up, prices will pick up,” Weinberg believes.

In company news, Canadian mining giant Teck Cominco announced it will slash spending, suspend dividends, sell assets, and withdraw from the Petaquilla copper project in Panama in an effort to ease the debt burden generated by its acquisition of Fording Canadian Coal Trust.

But on the optimists’ side, HudBay Minerals has unveiled a plan to buy Lundin Mining Corp, in a friendly deal that “creates a new Canadian leader in mining.” To replace Teck?  We’ll see.

Source: Base metals mixed – Zinc and nickel seen selling below cost of production