The base metals were mixed again on Thursday. Copper fell from the pre-dawn hours to just after the New York open, and though it rallied from there, failed to reach the green at $1.4432/lb., down 3 cents.

Nickel followed a very similar path to copper, closing at $5.0689/lb., down 16½ cents. Zinc was modestly lower, ending at $0.4914/lb., down more than a half-cent. Aluminum rallied late to escape the red, finishing at $0.6026/lb., up less than a quarter-cent, while lead had a decent day, adding a penny and a quarter, to $0.5172/lb.

Copper slipped again, as traders were forced to confront stockpiles that seem to be spiraling out of control.

It was the same old, same old, as copper inventories monitored by the LME skyrocketed by 22,750 metric tons yesterday, to 477,675 tons, marking their highest level since November of 2003.

It was also the “biggest one-day increase in London Metal Exchange copper warehouse stock levels since August 2004,” noted analyst Edward Meir of MF Global (NYSE:MF), one of the 12 companies that trades on the floor of the LME.

“We expect metal producers to scale back production for most of this year, as in addition to the credit issues, the cost pressures they face are enormous,” Meir wrote. “Deteriorating demand is still outpacing the rate at which production is being slashed.”

The day was filled with company news. First, Vale Inco said it has stopped shipping nickel concentrate from the giant Voisey’s Bay mine in Eastern Canada until it reaches agreement with the provinces over a proposed nickel processing plant.

Then Xstrata, the world’s #2 miner, announced a rights issue, intended to raise $5.9 billion, that will cause massive dilution as it runs shares in issue from 978 million to 2.9 billion. Xstrata is also suspending its dividend.

And Reuters reported that, “Mexico’s biggest copper miner Grupo Mexico will probably post a sharp decline in fourth-quarter revenue,” with sales dropping “40 percent to $932 million in the October-December period, from $1.56 billion in the same period of 2007, according to the average forecasts of four analysts consulted by Reuters.”

Source: Base Metals Were Mixed