Base Metals Rally
Apr 14th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were all flashing green on Monday. Copper was up early in the New York morning, then plateaued through the day, finishing at its intraday high of $2.0934/lb., up almost 4 cents from Thursday.
Nickel was flat through most of the day, rising late to surge past the $5 mark and close at $5.1014/lb., up 25 cents. Zinc had a good day, ending at $0.6279/lb., up a penny and three-quarters. Aluminum was modestly higher, adding just under a half-cent, to $0.6814/lb., while lead tacked on just short of a penny, at $0.6381/lb.
Copper led the industrial metals higher, rallying to a 6-month high as falling inventories and signs of economic recovery in China, the world’s largest copper consumer, gave traders some optimism about the metal’s prospects.
As Bloomberg wrote: “China’s government is considering additional stimulus measures to spur growth, the official China Securities Journal reported [yesterday]. New loans in China jumped sixfold from a year earlier to a record in March, the central bank said on April 11.”
China is planning a new economic stimulus package on top of an already announced 4 trillion yuan ($585 billion) stimulus plan to combat the economic crisis.
While the LME was closed for holiday yesterday, copper inventories monitored by the Shanghai Futures Exchange fell 18%, to 18,766 metric tons. That marked their lowest since early February.
Bloomberg again: “A report last week showed that China’s imports of [copper] jumped to a record in March. Shipments of refined copper surged 14 percent from the previous month to 374,957 metric tons, China’s customs office said on April 10, citing preliminary data. Copper-scrap imports were 330,000 tons, down 39 percent from a year earlier.”
And on the Shanghai Futures Exchange, copper for July delivery rose as much as 7%, the maximum allowed, leading Matthew Zeman, a trader at LaSalle Futures Group in Chicago, to comment that, “The fact that we were limit up in Shanghai is a big positive.”
In company news, Chile’s state-owned copper giant Codelco and China’s Minmetals are studying mining prospects with a view to joint exploration projects in Asia and Latin America, Chilean Mines Minister Santiago Gonzalez said.
“The companies are evaluating mining prospects at the moment. They are still not conducting any actual exploration as such, but we know that they are evaluating and analyzing some mining prospects in some parts of the world,” Gonzalez said.
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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.