Base Metals Mixed
Posted on: Feb 6th, 2009 | By Doug Casey | Filed under Financial News
The base metals were mostly lower on Thursday. Copper fell from the pre-dawn hours through mid-morning, but then rallied back to near positive territory, finishing at $1.485/lb., down three-quarters of a cent.
Nickel had a daylong down bias and closed at its intraday low of 5.0689/lb., down 14¼ cents. Zinc also plummeted to its intraday low, ending at $0.504/lb., down 2 cents. Aluminum was slightly higher, adding less than a quarter-cent to $0.6247/lb., while lead hit the skids, dropping a penny and three-quarters, to $0.5129/lb.
Copper was unable to make any headway, but held up remarkably well considering the dismal numbers coming out on the economic front.
The metal “will suffer from the economic worries,” said Frank McGhee, of Integrated Brokerage Services in Chicago. The unemployment benefits report released yesterday “certainly didn’t help out copper.”
And there was surely also some anxious awaiting of today’s jobless numbers, expected to be exceedingly grim.
Stockpiles continue to be relentlessly unhelpful, as well. Copper inventories monitored by the LME were up again yesterday, although modestly by recent standards, adding 2,650 metric tons, to shoot past the half-million mark, to 502,600 tons.
On the brighter side, South Korea announced that it plans to boost base metal reserves, ahead of an expected economic recovery later this year.
Nevertheless, “All economies around the world are suffering,” said Gijsbert Groenewegen, of Gold Arrow Capital Management in New York. “There was this illusion of decoupling, that only the U.S. would suffer, but that’s been proven wrong. Copper has further down to go.”
Despite the gloom, shovels are hard at work down South. As reported by Reuters: “Chile’s Codelco hopes to accelerate a nearly $1 billion expansion at its Andina copper mine in the Andes mountain range, investing aggressively at a time when most global miners are scrambling to balance their books.”
Rusal, though, is not about to follow suit. The world’s biggest aluminum producer announced deep production cuts yesterday, saying that the aluminum market has suffered “a rapid deterioration” over the last six months. Rusal will slash output by 11% annually.
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.