Base Metals Move Higher
Jun 24th, 2009 | By Doug Casey | Category: Gold MarketThe base metals mostly posted green numbers on Tuesday. Copper rose from the pre-dawn hours to mid-morning in New York, dipped a bit, but then continued upward, finishing just off its intraday highs at $2.1851/lb., up 4 2/3 cents.
Nickel traced a more jagged path, but in the end was also near its intraday highs at $6.6451/lb., up 15¼ cents. Zinc had a sharp morning drop, but rebounded to close at $0.6836/lb., up more than 2 cents. Aluminum moved slowly but steadily higher, eventually adding more than a penny, to $0.713/lb., while lead sounded the only sour note, dropping a penny and three-quarters, to $0.7357/lb.
Copper led most of the industrial metals higher, bouncing off of a 3-week low. “We’re seeing a snap-back in copper today in reaction to the weaker dollar,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “The dollar has been a big factor for a lot of the commodities lately.”
Gains were probably capped somewhat, though, by the less-than-stellar housing report.
Analyst opinion largely remains cautious. As Bloomberg wrote: “Robin Bhar, an analyst at Credit Agricole SA’s Calyon unit in London, predicted prices for industrial metals will continue to decline, citing skepticism about the potential for a global economic rebound and the strength of demand from China.
“Copper … has climbed 57 percent this year as refined copper imports by China rose. The Asian nation, the world’s largest consumer of the metal, accounted for 38 percent of global copper demand in the first quarter, 11 percentage points more than a year earlier, Barclays Capital estimates.
“ ‘I sense disillusionment over the “green shoots” of recovery and concerns that China’s growth is now slowing,’ Bhar said by telephone [yesterday]. ‘We are probably a bit too high, given the demand and supply fundamentals that we are seeing’.”
China’s refined copper imports almost have to slow in the third quarter after setting records in May. Imports may drop to about 300,000 tons in Q3, said Yoshihiro Nishiyama, of Japan’s Pan Pacific Copper Co. That’s after imports of 748,281 tons in the first quarter and 655,177 tons just in April and May.
But London stockpile data continue to support copper. Inventories monitored by the LME declined another 1,325 metric tons yesterday, to 276,675 tons.
Source: Base Metals Move 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.