Base Metals Spin Wheels, but BHP Reports Record Profits
Aug 19th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were mixed on Monday. Copper peaked during the pre-dawn hours, then moved steadily lower, with a small, late morning rally taking it off its lows and returning it to near break-even, with a finish at $3.3693/lb., down a quarter of a cent.
Nickel was also up pre-dawn, but sank straight through the day, closing at its intraday low of $8.1284/lb., down 24¼ cents. Zinc was sharply lower into the first hour of New York trading, but rallied back to end unchanged at $0.7559/lb. Aluminum had a long slide from its pre-dawn peak to $1.2273/lb., down more than a half-cent, while lead had a modestly higher day, adding more than a penny and three-quarters, to $0.7711/lb.
That copper declined after showing well in the overseas markets had some analysts questioning whether it can hold these levels. “Everything is looking bad for copper,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “People are still worried about demand.”
Zeman went on to say that, “A lot of people think the dollar is way overdone versus the euro and that it’s going to keep coming down from here in the near-term … If the dollar continues to weaken, that could provide some near-term support for the metals, but I don’t think any rally is going to be sustainable in copper.” He predicted that the price could fall as low as $3.20/lb.
In company news, the industry’s top-ranked heavyweight, BHP Billiton reported a sixth consecutive record full year profit. The giant miner said that net profit for the year ended June 30 rose to US$15.39 billion from $13.42 billion the year earlier, a 14.7% gain.
Finding itself with excess cash, BHP bumped its final dividend by 52%.
In an accompanying statement, BHP said it expects short-term global economic growth to slow but that, while rising inflation will likely have some negative impact on emerging market economies, they should remain relatively strong on the back of continued domestic infrastructure investment and regional trade.
And the company stressed that it will continue to try to merge with Rio Tinto (RIO), saying that hooking up with its rival makes more sense than ever, given the significant cost pressures in the industry.
Source: Base Metals Spin Wheels, but BHP Reports Record Profits
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