Base Metals Unchanged
Feb 16th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were stuck solidly in the mud on Friday. Copper spent most of the day well in the green, but some late selling dropped it back to near break-even as it finished at $1.5362/lb., up a bit more than a penny.
Nickel had a pair of sharp ups and downs that left it little changed at $4.6017/lb., down a penny and a quarter. Zinc was also near flat, ending at $0.5073/lb., up just a tenth of a cent. Aluminum was dead flat at $0.6065/lb., unchanged, while lead pushed slightly higher, closing at $0.5135/lb., up a quarter of a cent.
Copper eked out a small gain on a day that couldn’t have been more uninteresting for the industrial metals. After a couple days of this, is it possible we’ve finally reached some kind of equilibrium point, where the sudden, sharp moves we’ve become accustomed to become less frequent? It’s too soon to call it a trend, but stay tuned.
Analysts attributed at least some of the limited positive interest that did surface during the day to short covering ahead of the holiday weekend in the US.
“A steadier tone in U.S. equity markets after Thursday’s sharp rebound and a slightly weaker dollar lent a bit of strength to the copper market,” said Sterling Smith, vice president with FuturesOne in Chicago.
Also lending a hand was speculation that a stimulus package is boosting growth in China and will buoy demand. Economists surveyed by Bloomberg News estimated that the Chinese economy may expand at a 6.6% annual rate in the second quarter after the pace slows to 6.3% in the three months through March, the weakest pace since 1999.
“This is a China rally,” said William O’Neill, of Logic Advisors LLC in Upper Saddle River, New Jersey. “The picture looks better in China, but if you take the whole picture of the global economy, things don’t look as good … In the longer term, these prices will move higher. But to say there’s going to be any imminent improvement in demand in the short term is a bit of a stretch.”
Certainly, stockpile growth didn’t take a breather yesterday. Copper inventories monitored by the LME advanced by 2,875 metric tons, to 519,550 tons, the highest level since October of 2003.
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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.