The base metals were clogged up with red again on Tuesday. Copper fell until the late pre-dawn hours, caught an updraught from there to late morning in New York, but reversed field again to decline into a finish at $1.5845/lb., down nearly 3½ cents.

Nickel had a slight blip up heading into the New York open, but all the rest was downhill, as it closed at its intraday low of $4.2048/lb., down 16 1/3 cents. Zinc had a series of sharp ups and downs, to little ultimate effect, as it ended at $0.5182/lb., down two-thirds of a penny. Aluminum sagged straight through the day, stopping at its intraday low of $0.7416/lb., down more than a penny and a half, while lead was marginally lower at $0.4814/lb., down less than a quarter-cent.

Copper was off yet again, this time as investors eyed stockpiles that quickly reversed Monday’s gains.

Inventories monitored by the LME, which had fallen 450 metric tons on Monday, replaced them with nearly four times that amount on Tuesday, adding back 1825 tons to 293,025 tons.

Although they might have taken some heart from the fact that market action was light, and rallying equities that capped the downside, traders were clearly not pleased.

“Rising LME stocks suggest that producers are not completely out of the woods just yet, as they try to position themselves ahead of a rapidly deteriorating demand curve,” said Edward Meir.

Other analysts have completely succumbed to the gloom generated by a worldwide slowdown that threatens to be a long one.

Does it get any more negative than this: “The whole economy looks so bleak and dreary,” said Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “Copper has already come down by more than 50 percent, but it would not be surprising to see it go down another 50 percent from here. It could be a rough 2009.”

Zachary Oxman, of Wisdom Financial, put it bluntly: “I still think copper is a short trade,” he said.

Source: Base Metals Post Only Red Numbers