Base Metals Push Higher
Jan 19th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were all glowing green on Friday. Copper rose from the pre-dawn hours to the New York open and tailed off from there, but still hung in positive territory to finish at $1.5089/lb., up 3¾ cents.
Nickel shot up in the pre-dawn hours, then traded flat through most of the day, closing at $4.8376/lb., up 18¾ cents. Zinc had a lot of ups and downs, but ended at $0.5542/lb., up two-thirds of a cent. Aluminum was little changed, adding less than two-tenths of a cent, to $0.651/lb., while lead was modestly higher, tacking on a penny, to $0.5129/lb.
Copper led the industrial metals higher, rising the most in a week after the Bank of America (NYSE:BAC) bailout raised hopes that government stimulus plans might help to revive the economy.
Rising equities also helped. “Everything in copper is about the U.S. stock market, the government recovery packages and foreign demand,” said Frank McGhee, of Integrated Brokerage Services in Chicago. “Those three factors are going to continue to drive the price.”
The rally ran counter to stockpile growth, as copper inventories monitored by the LME advanced by 4,200 metric tons yesterday, to 391,525 tons, another 5-year high.
There was quite a lot of company news yesterday, beginning with an announcement by UBS (NYSE:UBS) that “Barclays Capital (NYSE:BCS) has agreed to terms for transferring the risks associated with UBS’ Base Metals, Oil and US Power & Gas businesses,” divesting UBS all of its commodities businesses with the exception of precious metals and the index and exchange-traded commodities activities.
From Russia came word of talks about the creation of a super-miner, by way of merging Norilsk Nickel, Rusal and Metalloinvest. Such a company would be a major competitor for BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP)
In Ecuador, President Correa said he will not back down from a recently approved law that encourages mining, and lifts a nine-month ban on exploration, though it has sparked protests by Indians and environmentalists.
And Barrick (NYSE:ABX) CEO Peter Munk warned that Canadian miners shouldn’t expect any support from the country’s government. “The ills and the problems of the mining industry are such today that they cannot be corrected by any kind of government action, be it Canadian or a global government,” Munk said. “We just have to wait until the world economy improves.”
Source:Base Metals Push Higher
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