Nickel traced a more jagged path, but in the end was also near its intraday highs at $6.6451/lb., up 15¼ cents. Zinc had a sharp morning drop, but rebounded to close at $0.6836/lb., up more than 2 cents. Aluminum moved slowly but steadily higher, eventually adding more than a penny, to $0.713/lb., while lead sounded the only sour note, dropping a penny and three-quarters, to $0.7357/lb.

Copper led most of the industrial metals higher, bouncing off of a 3-week low. “We’re seeing a snap-back in copper today in reaction to the weaker dollar,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “The dollar has been a big factor for a lot of the commodities lately.”

Gains were probably capped somewhat, though, by the less-than-stellar housing report.

Analyst opinion largely remains cautious. As Bloomberg wrote: “Robin Bhar, an analyst at Credit Agricole SA’s Calyon unit in London, predicted prices for industrial metals will continue to decline, citing skepticism about the potential for a global economic rebound and the strength of demand from China.

“Copper … has climbed 57 percent this year as refined copper imports by China rose. The Asian nation, the world’s largest consumer of the metal, accounted for 38 percent of global copper demand in the first quarter, 11 percentage points more than a year earlier, Barclays Capital estimates.

“ ‘I sense disillusionment over the “green shoots” of recovery and concerns that China’s growth is now slowing,’ Bhar said by telephone [yesterday]. ‘We are probably a bit too high, given the demand and supply fundamentals that we are seeing’.”

China’s refined copper imports almost have to slow in the third quarter after setting records in May. Imports may drop to about 300,000 tons in Q3, said Yoshihiro Nishiyama, of Japan’s Pan Pacific Copper Co. That’s after imports of 748,281 tons in the first quarter and 655,177 tons just in April and May.

But London stockpile data continue to support copper. Inventories monitored by the LME declined another 1,325 metric tons yesterday, to 276,675 tons.

Source: Base Metals Move Higher

Bloomberg reported that copper rose above $4,000 a metric ton [about $1.81/lb.] for the first time since November in London, gaining with other metals as a Federal Reserve plan to buy assets pulled the dollar lower and fanned speculation about an economic rebound.

“All markets are significantly higher, largely because of the impact of the Fed announcement last night, and the dollar is very weak,” Alex Heath, head of industrial metals trading at RBC Capital Markets in London, said yesterday.

Copper inventories in LME-monitored warehouses fell 0.3% to 493,450 metric tons, extending their decline since Feb. 25 to about 10%. Canceled warrants, or metal earmarked for delivery, fell 825 tons to 22,650 tons and now account for 4.6% of total inventories, down from 12% on March 4.

In technical terms, copper would have to close for two days above $3,840 a ton [about $1.74/lb.] for prices to move to about $4,190 [$1.90/lb.], the next so-called resistance level, Edward Meir, an analyst at MF Global (NYSE:MF) in Darien, Connecticut, wrote in a report.

“However, we would advise caution at these levels and would not be chasing the current bounce,” he wrote. “The market has done too much, too soon, given the still-daunting macro backdrop.”

The metal is unlikely to sustain its rally because the gain is based on expectations that the Fed plan will kick-start the U.S. economy, rather than any actual revival, said Robin Bhar, an analyst at Credit Agricole SA’s Calyon unit in London.

“It may well do, but I think we are talking months, not hours or days,” he said. “We are in completely unknown waters.”

Source: Base Metals Rally