Industrial Metals Mixed
Feb 13th, 2009 | By Doug Casey | Category: Financial NewsThe base metals were mostly lower on Thursday. Copper’s ups and downs virtually cancelled each other out yesterday, as the metal finished at $1.5249/lb., up a half-cent.
Nickel declined to the late morning, but then rallied back a bit to close at $4.6138/lb., down 5 2/3 cents. Zinc slid lower through most of the day, ending at $0.5061/lb., down a penny. Aluminum was weak, shedding more than a penny, to $0.6065/lb., while lead also edged lower, falling less than 2/3 of a cent, to $0.5112/lb.
Copper managed to eke out a small gain after three straight days of losses, but the other industrial metals all posted small declines as traders were underwhelmed by the stimulus package hacked out by Congress.
Commerzbank analysts were among the unimpressed, writing that, “In the medium term, the package should also revive the demand for base metals … in the short term, however, the effects on demand should be limited.”
The red metal’s recent strength represents the triumph of “hope over reality,” commented analyst Robin Bhar at Calyon. “Hope is that things are improving, reality is they are not,” he said, referring to the demand outlook.
On the stockpile front, yesterday’s addition was small but not non-existent. Copper inventories monitored by the LME advanced by 225 metric tons, to 516,675 tons.
Underscoring the weak demand in the eurozone, Norddeutsche Affinerie, Europe’s biggest copper producer, said it may shorten working hours in its copper processing division in Hamburg after posting a first-quarter pretax loss and announcing it expects its full-year profit to be down sharply.
Meanwhile, nickel prolonged a four-day slide on speculation demand will deteriorate as stainless-steel makers deplete inventories of the metal until they get some sign that economic growth is returning.
Demand for nickel will fall 15% this quarter from a year earlier and 10% in the next quarter, according to estimates from Barclays Capital. And Posco (NYSE:PKX), Asia’s biggest stainless-steel maker, cut prices last week for the first time since August, in an effort to up demand.
“We are clearly anxious over the coming quarters, and the market is remaining quite weak,” said Philippe Smits, of stainless-steel warehouse company Contisteel NV/SA in Belgium. “I’m not getting signs things are improving.”
Source: Industrial Metals Mixed
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