Base Metals Mixed
Nov 13th, 2008 | By Doug Casey | Category: Financial NewsThe base metals were mixed on Wednesday. Copper traded within a tight 4-cent range through the day, finishing near the lower end at $1.5875/lb., down a penny and a quarter.
Nickel traded choppily, with a bit of an up bias late, to close at $4.6644/lb., up a bit more than a penny. Zinc was down early, but recovered to end at its intraday high of $0.507/lb., up a penny and three-quarters. Aluminum was weak, dropping nearly a penny and a half, to $0.8349/lb., while lead plunged in the afternoon hours after most of the day in the green, settling at $0.5656/lb., down two-thirds of a cent.
Copper was weak on both bad economic numbers out of Europe, and on ballooning stockpiles.
European industrial production declined 2.4% in September, year over year, marking the biggest drop since February 2002, according to the European Union’s statistics office. From August, production sagged by 1.6%. The monthly dropoff was led by Germany, the world’s third-largest copper user after China and the U.S., according to the International Copper Study Group in Lisbon..
Meanwhile, copper inventories monitored by the LME shot higher again, advancing by 6,125 metric tons yesterday, to 271,600 tons, the highest level since 2004.
Codelco, the world’s biggest copper producer, scrambling to maintain market share, has cut surcharges for metal sold next year in Europe, Japan and South Korea. Codelco lowered its surcharge for metal sold next year to $65 a ton in Japan and $64 a ton in South Korea. In Europe, the fee will be $80 a ton.
Aluminum stockpiles jumped 6,125 tons to 1.56 million tons, the most since January 31, 1995. “Aluminum is now between 20 and 30 percent below production cost – they [producers] will cut back,” said said Jochen Hitzfeld, an analyst at UniCredit SpA in Munich.
True enough. Freeport-McMoRan Copper & Gold (NYSE:FCX), the world’s largest publicly traded copper producer, will reduce production at mines in North America next year, analysts at FBR Capital Markets (NASDAQ:FBCM) in Arlington, Virginia, wrote. And Industrial Info Resources reported that Freeport is deferring $1 billion worth of development projects in Arizona and Colorado.
Source: Base Metals Mixed
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