Base Metals Slammed
Posted on: Jun 23rd, 2009 | By Doug Casey | Filed under Gold Market
The base metals were all mired deep in the red on Monday. Copper sank slowly through the late pre-dawn hours, then faster through the New York day before just coming off its lows late to finish at $2.1387/lb., down 10 cents.
Nickel followed a similar track, but ended at its intraday low of $6.4932/lb., down 26¼ cents. Zinc also took a steep tumble, closing at $0.6625/lb., down almost 3¼ cents Aluminum was very weak, shedding nearly 4 cents, to $0.7017/lb., while lead rounded out the down day by dropping 2¾ cents, to $0.753/lb.
Copper led the industrial metals lower, falling to its lowest level since late May, as the metal was hit hard by the strengthening dollar and fears that the recent Chinese buying spree may be coming to an end.
“The Chinese may have to take a breather from buying physical copper as aggressively as they had up until now,” said Mike Frawley, global head of metals with Newedge Financial in New York.
“They have been the driver of this uptrend and if they curtail some of their buying interest, this set-back we are seeing now is not surprising at all,” Frawley added.
“Shanghai copper dipped after the release of May’s trade data due to the concerns that record shipments will exacerbate China’s domestic surplus,” wrote at HNA Topwin Futures Co.
Copper inventories monitored by the Shanghai exchange rose last week to the highest in almost 22 months, the exchange said after the close of market on Friday. And China’s refined copper imports stood at 337,230 tons last month, up 6% from April, the customs office said yesterday.
Despite imports which set records for the fourth straight month in May, apparent consumption in China fell 3.5% from April as stockpiles swelled, putting downward pressure on the Shanghai price.
Providing further evidence of weakened demand, data from the International Copper Study Group (ICSG) showed the world copper market in a 48,000-metric ton surplus during the first quarter of 2009.
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