The base metals had a mixed day Thursday as copper, nickel, and aluminum were down on the day, while zinc and lead both rose.

Copper traded up and down in throughout the day before settling at $3.7114/lb., down 3 ¼ cents. Zinc surged during the predawn hours, hitting an intraday high of $0.89/lb before sliding a little during the remaining trading hours. The metal finished up almost 1½ cents, at $0.8558/lb.

Nickel prices saw little change for most of the day until late morning, when the metal suddenly plummeted more than $0.20/lb. Nickel recovered somewhat in late trading, however, to finish down 12½ cents, at $8.2198/lb. Aluminum’s exhibited wide swings in prices before closing $1.3211/lb., down almost ¾ cents. Lead rose for most of the day, breaking past the $1 barrier again, to finish up more than 1¼ cents, at $1.0073/lb.

The big winner on the day was zinc, which rose on news that China, the world’s largest supplier and consumer of the metal, will remove tax breaks on zinc exports. This fueled belief that China will export less of the metal, leading to lower global supplies.

“This announcement caused a quick jump in zinc prices,” remarked John Reade of UBS. “This could be a trigger for a sharp move higher to $2,000 a ton or beyond.” Zinc has lost more than half of its value this year, falling to 2½ year low on July 4.

While copper rose early in the day because of the falling value of the dollar, economic data showing that U.S. economic growth fell by more than expected in the second quarter sent prices falling back again on concerns that a global economic slowdown could cause lower demand for the industrial metal.

Copper prices may continue to fall if U.S. economic difficulties don’t resolve themselves. According Michael Aronstein of Oscar Gruss & Sons Inc., if not, we may be “at the beginning of a long-term bear market” for copper.
Source: Base Metals Mixed, China Removes Tax Breaks on Zinc Exports