Base Metals Mostly Losers
Apr 17th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mostly red-tinged on Thursday. Copper peaked in the early pre-dawn hours, fell off to the New York open, rallied to late morning, but then declined again to finish at $2.1404/lb., down more than 4 cents.
Nickel followed copper, except that it rallied after the second dip, and pushed back into the green at $5.5799/lb., up almost 3½ cents. Zinc declined slightly, ending at $0.6665/lb., down a quarter-cent. Aluminum was weak, closing at $0.656/lb., down a penny and a third, while lead plummeted to its intraday low of $0.6663/lb., down 2¾ cents.
Copper led the bulk of the industrial metals lower, as a number of elements combined to roll back about half of the metal’s Wednesday gains.
Foremost was the negative data out of the housing market, which led many to cash in profits and head for the exits. “The housing data has taken a lot of the wind out of the sails for copper,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “Housing is clearly not out of the woods yet, and that’s going to take a toll on copper demand.”
But also factoring in was the rising dollar and concerns about data showing a slower rate of expansion in China’s economy.
China, the world’s number one copper consumer, said its economy grew at a slower-than-expected 6.1% in the first quarter of this year, the weakest pace since the fourth quarter of 1999. But it also showed an uptick in March, which some were hoping signals the worst is past.
“The Chinese data disappointed,” wrote Alex Heath, of RBC Capital Markets in London. The figures were “not the kind of picture that should support further price gains on the metals.”
But stockpile numbers pulled in the opposite direction, perhaps limiting the day’s downside. Copper inventories monitored by the LME dropped again yesterday, shedding 5,200 metric tons to 475,200 tons. Stocks have now fallen for four consecutive sessions, the longest slide in a month, and are down 13% from the four-year high reached on February 25.
Much of that metal is headed for China, where the Shanghai premium over London is still about $150 to $200 a ton.
Source: Base Metals Mostly Losers
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