Copper Rises Most in a Week
May 16th, 2008 | By Doug Casey | Category: Gold MarketThe base metals were mixed on Thursday. Copper rose straight from the pre-dawn hours until about noon, then eased slightly off its intraday high to finish at $3.7867/lb., up 6½ cents.
Nickel was back over $12 at the New York open, but couldn’t hold there, falling to $11.906/lb., down 8 1/3 cents. Zinc rallied to near $1.04 at the noon hour but hit the skids thereafter and wound up losing nearly a penny and a quarter, at $1.0125/lb. Aluminum pushed higher for most of the day, just slipping at the end to $1.3306/lb., up 2 cents, while lead was sharply up and then down to little effect as it lost a bit more than a third of a cent, to $1.0113/lb.
Copper was up the most in more than a week as traders expressed their concern about supply shortfalls.
Inventories monitored by the LME dropped 575 metric tons yesterday, or 0.5%, to 120,850 tons. It was the biggest decline since May 7.
“Inventories are very low,” Helen Henton, head of commodity research at London-based Standard Chartered Plc, said yesterday. “With any supply disruptions, we have the potential for the market to push prices higher.”
Perhaps so, but there isn’t a lot of optimism out there.
“We are swinging back towards the upside, but trading lacks conviction, with prices hemmed in within narrow trading bands in most of the metals,” said MF Global analyst Edward Meir. “A weaker dollar is supporting the complex, but a distinct lack of buying out of China, especially on the copper side, is keeping the upside potential in check.”
UBS analyst John Reade concurred, saying that, “We are loathe to be long base metals in general at the moment as prices are elevated by speculative length and the prospects of ongoing production disruption … Consumer demand is soft, based on our conversations with the trade.”
In company news, Reuters wrote that: “Chinese interests have approached a major Australian superannuation and investment fund to be their partner in a multi-billion-dollar swoop on 9 percent of BHP Billiton The Australian newspaper reported.
“Under the terms of the proposed deal, the Chinese would take 4.5 per cent of BHP Billiton, while the other half would be split between the Australian fund and a global private equity investor, the paper said on it’s Web site.”
Source: Copper Rises Most in a Week
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