Base Metals Mostly Lower
Jun 17th, 2009 | By Doug Casey | Category: Gold MarketThe base metals were mostly a bit lower on Tuesday. Copper climbed from the pre-dawn hours to mid-morning in New York, peaking north of $2.30 before falling as steeply as it rose and finishing $2.2426/lb., down a bit less than 2¼ cents.
Nickel followed a similar path but didn’t sell off as much, and held in positive territory at $6.7094/lb., up nearly 8½ cents. Zinc had a succession of very sharp ups and downs, resulting in a close at $0.6904/lb., down 2/3 of a cent. Aluminum also negated its strong early gains, ending at $0.7062/lb., down the better part of a penny, while lead was modestly lower at $0.7418/lb., down less than a half-cent.
Copper failed to hold onto its early gains and led most of the industrial metals in a modest retreat yesterday, as traders flip-flopped and turned suddenly negative in the middle of the session.
“Copper is following the stocks and the general outlook” for the economy, said Frank McGhee, of Integrated Brokerage Services LLC in Chicago, and that was certainly true with regard to the broader markets, which began moving into the red around mid-morning.
However, McGhee added that the day’s housing data should give copper prices a “short-term” boost and that, while it might seem obvious given the need for copper in new houses, failed to come to pass.
The weakening dollar also should have been somewhat supportive, and wasn’t, perhaps because the buck was able to pare its losses over the course of the day.
On the positive side, London stockpiles continued to decline, with copper inventories monitored by the LME slipping a smallish 1,925 metric tons yesterday, to 285,050 tons, the lowest level since last November 24. Inventories are off almost 50% since this year’s high, notched on February 25.
In company news, we noted yesterday that BHP Billiton (NYSE:BHP) and (NYSE:RTP) Rio Tinto’s proposal for a joint Australian iron ore venture could run afoul of Chinese anti-monopoly law. To expand on that, Yao Jian, spokesman for China’s Ministry of Commerce, said that the law requires a company to get government approval before consolidation if its global revenue exceeds Yuan 10 billion ($1.47 billion) and its revenue in China exceeds Yuan 2 billion.
In the year ended June 30, 2008, BHP’s revenue in China was $11.7 billion, Rio’s $10.8 billion, but Yao says the ministry has not received an application from either firm, and no one knows what actions China might take if the companies were determined to be acting contrary to the law.
Source: Base Metals Mostly Lower
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