Industrial Metals Get A Pop
Apr 1st, 2009 | By Doug Casey | Category: Financial NewsThe base metals were all in positive territory on Tuesday. Except for a mid-morning lull, copper advanced from the pre-dawn hours straight through the day, barely coming off its intraday highs late to finish at $1.8167/lb., up more than 8 1/3 cents.
Nickel was down until around noon, when it went vertical, to close at $4.3484/lb., up almost 11 cents. Zinc had a lot of ups and downs, but ended in the green at $0.5856/lb., up a penny. Aluminum was listless, adding just a tenth of a cent, to $0.6143/lb., while lead had a good day, adding just over a penny, to $0.572/lb.
Copper led the industrial metals higher, concurrently turning in a quarterly gain of 30%, its biggest percentage rise since the second quarter of 2006, as traders responded brightly to the weakening dollar and rising equities.
“We’re getting a bounce in copper and the rest of the metals today based on the weaker dollar,” said Matthew Zeman, of LaSalle Futures Group in Chicago. “We could see copper continue to move higher if the dollar stays at weaker levels.”
In addition to the dollar and equities, Zeman added that he saw “copper buoyed by quarter-end positioning … and a positive tone at the 8th annual CRU World Copper Conference and CESCO Week.”
But he warned that the “market is likely in for a test of the $2.00 level … There is a floor under copper prices right now and it does have the potential to move a little higher, … [but] we’re going to need to see a real rebound in the economy before we can go much higher than $2.”
On the supply front, copper inventories monitored by the LME fell below the 500,000 metric ton mark yesterday, shedding 1,775 tons, to settle at 499,625.
Joining in the optimists’ choir was Jose Pablo Arellano, CEO of Chile’s state-owned Codelco, the world’s biggest copper producer. U.S. copper demand may have reached bottom, Arellano said yesterday, citing unspecific signs that declining consumption will be arrested by growth-inducing government spending.
The market may also have been affected by word that Grupo Mexico will close down its giant Cananea copper mine due to damage to the facility caused by a 20-month strike. The company is said to be seeking a ruling from a labor tribunal that would allow it to fire the striking workers at the mine following the closure, but there was no indication as to when the mine might reopen.
Source: Industrial Metals Get A Pop
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