Nickel had a daylong down bias and closed at its intraday low of 5.0689/lb., down 14¼ cents. Zinc also plummeted to its intraday low, ending at $0.504/lb., down 2 cents. Aluminum was slightly higher, adding less than a quarter-cent to $0.6247/lb., while lead hit the skids, dropping a penny and three-quarters, to $0.5129/lb.

Copper was unable to make any headway, but held up remarkably well considering the dismal numbers coming out on the economic front.

The metal “will suffer from the economic worries,” said Frank McGhee, of Integrated Brokerage Services in Chicago. The unemployment benefits report released yesterday “certainly didn’t help out copper.”

And there was surely also some anxious awaiting of today’s jobless numbers, expected to be exceedingly grim.

Stockpiles continue to be relentlessly unhelpful, as well. Copper inventories monitored by the LME were up again yesterday, although modestly by recent standards, adding 2,650 metric tons, to shoot past the half-million mark, to 502,600 tons.

On the brighter side, South Korea announced that it plans to boost base metal reserves, ahead of an expected economic recovery later this year.

Nevertheless, “All economies around the world are suffering,” said Gijsbert Groenewegen, of Gold Arrow Capital Management in New York. “There was this illusion of decoupling, that only the U.S. would suffer, but that’s been proven wrong. Copper has further down to go.”

Despite the gloom, shovels are hard at work down South. As reported by Reuters: “Chile’s Codelco hopes to accelerate a nearly $1 billion expansion at its Andina copper mine in the Andes mountain range, investing aggressively at a time when most global miners are scrambling to balance their books.”

Rusal, though, is not about to follow suit. The world’s biggest aluminum producer announced deep production cuts yesterday, saying that the aluminum market has suffered “a rapid deterioration” over the last six months. Rusal will slash output by 11% annually.

Source: Base Metals Mixed

Zinc had a decent day, ending at its intraday high of $0.581/lb., up better than a penny and a half. Aluminum pushed higher all day, ultimately adding 3¼ cents, to $0.719/lb., while lead shot straight up to its intraday high of $0.5398/lb., up 4 cents.

Copper led the industrial metals higher, soaring to a one-month high past the $1.50 mark as the new year buying momentum gathered some steam as economic stimulus optimism prevailed alongside the annual portfolio rebalancing by index funds.

“Metals could do somewhat better over the course of the week,” wrote Edward Meir, of MF Global (NYSE:MF). He noted that copper prices may be supported by “a massive stimulus program coming out of the Obama administration.” President-elect Obama has reportedly told House Speaker Nancy Pelosi he favors a $775 billion stimulus package.

However, any new demand will remain theoretical in the face of stockpiles that continue higher. Copper inventories monitored by the LME gained another 1450 metric tons yesterday, to 343,500 tons.

Brian Hicks, of U.S. Global Investors in San Antonio, says that, “I think we’ve found a bottom for copper, and that’s reflected in the changing sentiment.” But Hicks admits that, “I’m still not sure how much upside there is now” because of the sagging economy.

Questionable demand or no, resource-dependent Chile is wading into the fray. Yesterday, President Michelle Bachelet announced a $4 billion stimulus package that includes $1 billion in capitalization for state copper giant Codelco, the world’s largest producer, to help shore up its investment plans. The stimulus package will be funded from copper windfall earnings saved in sovereign wealth funds as well as through a bond issuance, Bachellet said.

And on the equities front, a number of Canadian base metal miners hit multi-month highs on the Toronto Stock Exchange on Tuesday, as some hope for a sustained rebound has leaked into the hard-hit sector.

“The realization is that the demand tap has not been turned off, it’s just been turned down a tad,” commented Ron Coll, an analyst at Jennings Capital.

Source: Industrial Metals Rally Strongly

Nickel fell until mid-morning, before rallying back a little bit to close at $4.2018/lb., down better than 26 1/3 cents. Zinc had a pleasantly good day, rising fairly steadily to finish at $0.5101/lb., up more than 3½ cents. Aluminum also pushed higher, adding more than a penny and three-quarters, to $0.8918/lb., while lead moved up modestly, tacking on less than a penny, to $0.558/lb.

Once again copper failed to gain much traction, although it came well off its lows for the day (and a fresh 3-year low), as fear continues to dominate. The metal is now down 58% since July.

Even producers are getting pessimistic. Copper’s swift and savage fall has ushered in “the end of the supercycle” for the metal, says Jose Pablo Arellano, the executive president of Chile’s Codelco, the world’s biggest copper miner. Arellano expects that the market will remain depressed until the international economic situation begins to show signs of improvement.

Not that the selloff isn’t general. The Reuters/Jefferies CRB Index of 19 commodities yesterday hit its lowest level since February 2004, and the Bloomberg World Mining Index of 162 companies has shed $493 billion in value since the bankruptcy of Lehman Brothers in September.

“As long as we have uncertainty about the overall financial system, this is probably not yet the bottom for base metals,” said Christoph Eibl, of Tiberius Asset Management in Zug, Switzerland. “People just don’t want to own any commodities that have a high correlation to overall economic developments.”

On the supply side, copper inventories monitored by the LME continued to advance, adding 1,500 metric tons to 209,250 tons, while aluminum stockpiles jumped 3,475 tons to 1.5 million tons, their highest level since February 1995

In company news, Canadian miner Teck Cominco (NYSE:TCK) reported that net profit fell a worse-than-expected 13% in the third quarter, primarily because of the price declines in commodities. However, Teck also raised its outlook for 2008 capital spending by 26%, to about C$1.1 billion.

Source: Base Metals Mostly Stabilize

Nickel followed copper’s lead as prices fell precipitously, as the metal lost 44 ½ cents to close at $8.4361/lb, a two-year low. Zinc started the day well, reaching an intraday high over $0.87 in early-morning trading, but soon followed the other base metals into the red, sliding to $0.8385/lb., down 1 ½ cents. Aluminum dropped as well, closing down almost 2 cents, at $1.3206/lb. Lead erased some of its gains over the previous two days, falling back below the $1 mark to $0.9902/lb., down 2 cents.

Copper’s losses were the result of a poor outlook for global demand as sales of previously owned homes in the U.S. fell last month to their lowest levels in more than a decade, according a National Association of Realtor’s report. This evidence of the continued housing slump bodes poorly for copper demand, which is largely dependant upon construction of new housing.

Concern about falling demand is outweighing fears of news of declining mine output from Codelco, the largest copper producer in the world. Codelco announced that labor problems and declining ore quality might cut production for the fourth consecutive year.

According to Matthew Zeman of LaSalle Futures Group, traders are “shrugging off” supply concerns because of “the outlook for a global slowdown and the anticipation of falling demand.” He continued that “people are thinking, ‘What difference does it make anyway,’ since demand is going down.”

Nickel’s huge drop was also fueled by falling demand. Robin Bhar of Calyon wrote that “There has been increasing evidence of weak demand from the stainless steel sector in the third quarter.” Production of stainless steel accounts for two-thirds of all nickel consumption.

Source: Base Metals Fall

Nickel flirted with the $12 mark around mid-morning, but then collapsed, closing at its intraday low of $11.7972/lb., down almost 11 cents. Zinc’s fuse was lit early in the pre-dawn hours and it rallied all day long, just coming off its intraday high to end at $1.0523/lb., up 4 cents. Aluminum also came well off its mid-morning highs but managed a gain of 2 cents, to $1.3504/lb., while lead was up sharply, easing just a bit late to $1.0496/lb., up more than 3¾ cents.

Copper rose to a one-week high, primarily on the declining dollar and inflation fears.

In addition, labor issues “still fester in the background, lending support” to the copper price, wrote Edward Meir, of MF Global.

Indeed, early in the day, leaders of a group representing employees of contractors for Codelco, the world’s biggest producer, said they might resume protests because workers had not received bonuses under the agreement that ended the recent strike.

In response, Codelco said that 23,000 contract workers have received bonuses, and Chile’s government said it is complying with the May 5 agreement.

But the market is delicately balanced. “What we have got on the downside are concerns about falling Chinese demand. Until we see that pick up, it is unlikely we are going to see a significant push higher,” said Barclays Capital analyst Gayle Berry, over against “what prevents (copper) from falling too far is still these supply-side concerns.”

Meanwhile, zinc headed for it best weekly gain since February, as traders remained uneasy about the extent of earthquake damage to processing facilities in China.

“If it’s sustained damage, it’s going to be a disruption that makes markets nervous,” said Giles Lloyd, a zinc analyst at London-based researcher CRU in London.

And as an additional side effect, “now there is likely to be even more demand for metal[s] as fabricators gear up for the reconstruction that will be needed following [the quake],” said BaseMetals.com’s William Adams.

In company news comes word from Australia that the major public servant-funded superannuation funds in that country have ruled out any plan to team with Chinese interests in a raid on BHP Billiton shares, undermining the latest in a string of rumors that has driven BHP’s shares to record levels.

Source: Base Metals Mostly Sharply Higher

Nickel rose slowly but steadily until mid-morning then went flat, closing at $12.1899/lb., up 15¾ cents. Zinc broke past $1 in the pre-dawn hours and continued higher, leveling off around noon at $1.0378/lb., up more than 6 cents. Aluminum had some sharp ups and downs to little ultimate effect as it gained less than a tenth of a cent, to $1.31/lb., while lead continued its comeback for a second straight day, adding 2¾ cents, to $1.0399/lb.

Copper traders continued to schiz out, vacillating between concerns over the stronger dollar on the one hand, and potential supply disruptions on the other.

Even though a nationwide miners’ strike in Peru was postponed for 15 days in order to allow for further negotiations, the market is still casting a wary eye on developments in that key metal producer.

“[Peru] is the world’s largest silver producer, and produces significant amounts of zinc and copper, consequently strike action could lead to higher prices for these metals,” said Fairfax analyst John Meyer.

To the south, in Chile, fears that recent strikes at Codelco plants could be resumed have been stoked after the Supreme Court ruled the state mining giant does not have to offer thousands of subcontractors full-time positions.

Subcontractors had agreed to end their 3-week strike on May 5 after a pledge from Codelco to make many of them full-time, and to pay a bonus.

Union leaders have already begun a hunger strike, saying that Codelco still has not acted upon the pledges it made last week.

Meanwhile, zinc’s gain yesterday was the steepest in 2½ months, as speculators placed bets that that the earthquake in China, the world’s largest producer of the metal, might put some curbs on production. As much as 11% of the nation’s smelting capacity, or some 500,000 tons, was probably affected by the quake, Reuters reported.

Disruption in China came on the heels of a strike at Skorpion’s zinc mine in Namibia, Africa’s largest. “The strike at the Skorpion mine and uncertainty over zinc production in China’s Sichuan province are now adding a new facet to what is becoming a very interesting story,” wrote RBC Capital Markets analysts.

Still, Max Layton, an analyst at Macquarie Group in London, isn’t pushing the panic button. Any impact from the earthquake “would be very small,” he said. The bank forecast a zinc surplus of 88,000 metric tons this year, rising to 202,000 tons in 2009 as new mines come on line.

Source: Industrial Metals Mostly Higher

Nickel hit the skids, falling throughout the day and closing at $12.3362/lb., down more than 48½ cents. Zinc dropped back below $1, ending at $0.9901/lb., down nearly two cents. Aluminum was weak, shedding better than a penny and three-quarters, to $1.2821/lb., while lead tumbled off a cliff in the late morning, plunging to its intraday low of $1.0486/lb., down 4 1/3 cents.

Whatever expectations of economic turnaround may have been generated by the Fed’s most recent rate cut seem to have evaporated from the industrial metals market, at least for the time being. The bears are fully in charge right now.

“Metals seem to be caught among various crosscurrents for the moment, but having moved up so quickly when the dollar was weakening, a re-surging greenback seems to be working its magic in reverse,” said Ed Meir, of MF Global.

The metals took their cue from the buck’s morning strength, rather than the weakening in the afternoon hours. Chinese buyers also appear to be sitting on the sidelines for a while, hoping to help drive prices lower before jumping back in.

But conflicting factors remain.

“The internal fundamentals for copper and a number of the metals remain bullish, but not bullish enough at present to counter the selling as commodity trades are closed as hedges against dollar weakness are unwound,” said William Adams, an analyst at BaseMetals.com.

Supply problems are still out there, even after this week’s settlement of the copper strike at Chile’s Codelco mines.

In the offing are more potential walkouts. Next up, Peru, where union workers at mines throughout the country are ready to strike next week to demand better labor benefits.

“We have 33 unions supporting us,” said Luis Castillo, leader of Peru’s biggest mining union federation. “We will go on nationwide strike on May 12 no matter what.”

Peru is the world’s leading silver producer, ranks second in copper and zinc, and fifth in gold.

Nickel had a directionless day, eventually easing to $12.82/lb., down 5 2/3 cents. Zinc traded with a down bias, falling below $1 at one point before climbing back to close at $1.0089/lb., down two-thirds of a cent. Aluminum declined slowly but steadily to end at $1.3002/lb., down more than a penny and three-quarters, while lead continued weak, shedding 5¾ cents, to $1.0916/lb.

Base metal buyers backed off as easing supply fears and a strongly firming dollar combined to limit their appeal.

The end of the 3-week strike at three of Codelco’s copper mines in Chile, which had helped underpin the market, finally made its effects felt yesterday, a day after workers settled with the company. The biggest mine, El Teniente (25% of output), reopened Tuesday afternoon, Andina mine is back at 80% of capacity, and El Salvador could restart by the end of the week.

However, some analysts believe the resolution may not hold. Alex Heath of RBC Capital Markets warned that: “An agreement to a bonus award does not address the underlying issue of hiring contract workers onto the permanent workforce that was at the root of the industrial action … Given that this has still not been addressed, it may prove to be only a temporary solution.”

And supplies do still remain constricted, as copper inventories monitored by the LME reported a drop of 625 metric tons yesterday, to 109,025 tons.

The deciding factor determining copper’s direction will likely be China, and although Shanghai inventories fell for a third straight week, the demand picture is fuzzy. Chinese copper imports fell by 19% in Q1, and observers are expecting further declines in April’s data, due out next week.

“Demand seems to be softening somewhat on a global basis, and Chinese use has come down,” said John Gross, publisher of the Copper Journal. “There’s some concern demand will continue to slow.”

Finally, those of a certain age will remember collecting 1943 pennies as kids, that year being the only one in which the penny was made of steel rather than copper. Now, with the cost of fabricating a penny at 1.25 cents, Congress is debating bring back, yes, the steel penny. Of course, it’d be simpler to get rid of the coin entirely, since it no longer has any real utility. But when has the government ever opted for the simple solution?

Nickel also rallied, turning in a solid day to close at $12.8767/lb., up nearly 15½ cents. Zinc muscled its way back over the $1 mark, finishing at $1.0157/lb., up 3 1/3 cents. Aluminum had a decent day, adding just under 2 cents to $1.3187/lb., while lead bucked the positive trend by dropping a penny, to $1.149/lb.

Buyers were out in force yesterday, despite a drop in supply worries.

“The base and precious metals are rebounding strongly … buoyed by a combination of a down turn in the value of the dollar and a sharp move higher in crude …,” said JP Morgan analyst Michael Jansen. “This has pushed copper up towards the $8,520/mt area, which is a little surprising in light of the end of the Codelco subcontractors strike, and might indeed reflect some of the price action on Monday in New York when Comex was sharply higher, up around 11 percent at one stage.”

The settlement in Chile was the day’s biggest consideration. The country’s state-owned copper miner, Codelco, said that employees of contractors have voted to end their 3-week strike. Andina and El Teniente, Codelco’s second biggest project, have been re-opened.

The last remaining shuttered mine, El Salvador, is due to come back on line later this week.

Strike’s end left more than a few analysts scratching their heads. “The strike was the main support to copper prices and everyone expected prices would come down after it ended,” said Catherine Virga, of CPM Group in New York. “Now that this short-term supply shock has been taken out, people have to reevaluate their outlook for the market,” she offered.

Virga was among those still unable to explain Monday’s sudden huge jump, and equally quick fall, in the copper price.

Noting that neither London nor Shanghai had anything similar today, “it signals that yesterday’s move was only something that happened with a few traders in New York,” she said, adding that, “I can’t imagine what would have driven prices up that high.”

Nickel also rallied off its pre-dawn lows, but it wasn’t enough to get it back into the black as it closed at $12.724/lb., down 4½ cents. Zinc inched higher, ending at $0.9824/lb., up three-quarters of a cent. Aluminum had a strong day, adding 2 2/3 cents to $1.2998/lb., while lead logged a modest gain to $1.1595/lb., up a penny and a quarter.

After the bloodletting on Thursday, most traders were clearly in a bargain-hunting mood yesterday.

“In the likes of copper where the fundamentals are tight and, if anything, tightening, this sell-off may well be snapped up as a buying opportunity,” said Basemetals.com analyst William Adams.

“This is especially so when you consider that the equity and dollar rally is unfolding on the back of high hopes that the interest rate cuts and other measures the U.S. Federal Reserve has taken will bolster the U.S. economy, which in turn should be good for metal demand,” Adams added.

Also factoring in were supply worries. Inventories monitored by the LME dropped by 450 metric tons yesterday, to 109,625 tons.

Bill O’Neill, of LOGIC Advisors in Upper Saddle River, New Jersey, remains bullish, saying that, “The market has a very solid underlying base as far as low free stocks are concerned. We have the Codelco strike situation continuing, so I think there is some pretty good underlying fundamentals within the market … Long term, this copper bull market is still in play.”

The Codelco situation remained unchanged yesterday, with the Andino and Salvador mines staying shut, and no end to the strike in sight.

And a Macquarie Bank report said Chinese copper demand for the first quarter was up by only 1% year-on-year, as consumers re-built stocks. However, “Aluminium was up by 9.5% year-on-year, affected by supply disruptions following weather/power problems and lower exports of aluminium fabricated products,” the report noted.

Most analysts believe that the industrial metals will be driven in the near future by the dollar, as traders try to divine whether a real rally is underway, or whether the buck is merely making a dead cat bounce. Monday will have little to tell, as the LME is closed for holiday.