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

Nickel blasted back over $13.10 in the late morning, but then fell sharply to close at $12.8374/lb., down almost 5 cents. Zinc was up and down with little change, ending at $1.0024/lb., down less than a quarter of a cent. Aluminum sagged to $1.307/lb., down 1 2/3 cents, while lead was marginally higher at $1.2228/lb., up two-tenths of a cent.

The Fed’s action had little effect on the industrial metals, with copper rising slightly on what analysts tabbed as primarily short covering.

Volume was light, as most of the trading came before the Fed weighed in.

Also factoring in was the slight rise in GDP, as expected, with speculators hoping that that signals a rise in future demand.

The strike against state-owned Codelco in Chile continued, but even down there, “All eyes are on the Fed,” said Bart Melek, global commodity strategist with BMO Capital Markets.

Melek went on to say that strike participants were mostly “keeping their powder dry” ahead of the interest rate announcement.

Supply data came in slightly bearish yesterday. Inventories monitored by the LME rose 875 metric tons, to 110,525 tons.

Had the Fed’s rhetoric indicated a more hawkish stance on inflation is coming down the road, “we wouldn’t be surprised to see a bit of a correction here in copper,” said Michael Gross, of OptionSellers.com. Gross added that over the next month the metal could pull back to the $3 to $3.25 range.

But with no clear signal given, prices are likely to “continue to move sideways” within a $3.85 to just over $4 range, said Eric Wittenauer, analyst with Wachovia Securities.

In company news, Grupo Mexico said on Monday that its plans to ramp up output at its giant Cananea copper pit have been delayed indefinitely after a labor board declared a 9-month-long strike there legal.

Grupo Mexico hoped to have significant production by May but plans were stifled by new worker blockades this month. “At this point, we are unable to provide a revised copper production guidance for the remainder of the year and the date at which we will resume operations is not currently foreseeable,” said CFO Daniel Muniz.