Base Metals Mostly Higher
Apr 27th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mostly higher on Friday. Copper was little changed until New York opened, then took off down the track, riding an almost uninterrupted surge through the day and finishing at its intraday high of $2.0413/lb., up more than 9¼ cents.
Nickel pushed higher and, though it eased late, still closed above the $5 mark at $5.1256/lb., up better than 13¾ cents. Zinc was off early, but recovered to end at $0.6293/lb., up a half-cent. Aluminum was modestly higher, adding a third of a cent, to $0.6439/lb., while lead dropped less than a quarter-cent, at $0.6458/lb.
Copper had a grand resurgence yesterday, terminating a four-day slide and storming back over the $2 mark as another dramatic falloff in inventories persuaded traders that demand is picking up.
On the stockpile front, copper inventories monitored by the LME plummeted yesterday, falling by 10,525 metric tons to 429,550 tons. LME stocks have fallen for 10 straight sessions and are now down 14% just this month.
Much of the outflow has been heading for the far East, due to the difference in premiums between London and Shanghai, but China’s stockpiles have yet to reflect much input. Inventories monitored by the Shanghai Futures Exchange plunged 34% this week, to 15,051 metric tons.
The industrial metals also benefited from the declining dollar, which gave them a boost as an inflation hedge. And they responded to the housing and manufacturing data, which, although continuing to be dismal, came in better than expected.
Looking ahead, copper will average $1.90 a pound this year as production outpaces demand, analysts at RBS Global Banking & Markets wrote. Output of the metal will top demand by 700,000 metric tons in 2009 as use declines 6 percent, Edinburgh-based RBS forecast.
While William O’Neill, of Logic Advisors in Upper Saddle River, New Jersey noted that “the weaker dollar is certainly helping copper … [and] the mildly encouraging economic numbers are also supporting the price,” he cautioned that, “The big negative that’s still hanging over copper is the production surplus that we’ll have this year … Demand has fallen a lot.”
Source: Base Metals Mostly Higher
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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.