Base Metals Mixed, Zinc Hits Two-year Low
Aug 6th, 2008 | By Doug Casey | Category: Financial News, Gold MarketIt was a mixed day for the base metals Tuesday as copper, nickel, and zinc lost ground, while aluminum and lead rose. Copper was up and down during the day’s trading, dipping briefly below $3.47/lb. in the early morning.
The metal pared its losses with a rally later in the day to finish down a little more than ½ cents, at $3.4997/lb. Zinc also took a dive in the pre-dawn hours, but rallied slightly from that point to end down less then a penny, at $0.7889/lb. Nickel was nearly unchanged in early trading, but dropped almost vertically in the pre-dawn hours to close at $7.8713/lb., down almost 19 cents on the day.
Aluminum bucked the trend of the other base metals by trending higher throughout the day. The metal closed up more than 1 cent, at $1.2907/lb. Lead followed aluminum into the black Tuesday, ending at $0.9228, up almost 1 cent.
Copper’s decline to its lowest value in six months was fueled by more signs that demand for the industrial metal may be slowing.
Jiangxi Copper Co. (JIAXF), reported that appliance manufacturers in China have decreased purchases of copper for use in refrigerators and air conditioners.
“The economic news and demand situation continues to be bearish,” wrote Michael Gross of OptionSellers.com. “There’s more room to go on the downside for copper.”
Meanwhile, zinc’s sharp losses brought prices to a two-year low.
The decline was a reaction to rising stockpiles and weakening demand amid global economic difficulties. Stockpiles tracked by the LME have tripled over the past year.
“As LME inventories increased, investors’ assessment of the market has changed,” stated Tobias Merath of Credit Suisse Group in Singapore. “They see it as a sign of weakening demand.”
Source: Base Metals Mixed, Zinc Hits Two-year Low
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