While copper was down in late trading, the early rally was enough for Michael Gross, an OptionSellers.com analyst in Tampa, Florida, to comment that, “With the oil moving up and gold being higher, that got people into copper today … A lot of traders didn’t want to go home over the weekend short on copper.”

But Gross hastened to add that, “It’s mostly a technical play, based on gold and oil. The fundamentals are still weak.”

That was certainly borne out by the stockpile situation, as copper inventories monitored by the LME shot up by 13,850 metric tons yesterday, to 491,525 tons. That brought the gain for January to a stunning 150,000 tons.

Also factoring in, said Pete Sorrentino, of Huntington Asset Advisors in Cincinnati, was that, “There were some unrealistic expectations about what the stimulus plan was going to mean” for copper, and he predicted that prices will remain depressed.

That’s also the view of Chip Hanlon, of Delta Global Advisors (NYSE:SEA) in Huntington Beach, California, who maintains that, “The global economy is entrenched in such a deep deleveraging and slowdown that it’s going to be a few months at least before we can see a recovery.”

In company news, on Thursday we reported that Vale Inco had stopped shipping nickel concentrate from the giant Voisey’s Bay mine in Eastern Canada. Yesterday, Vale announced it had reached agreement with the province of Newfoundland and Labrador, and that shipments are ready to resume.

And from Chile comes word that its copper output fell 8.9% in December and 4.2% for all of 2008, as the world’s biggest copper producer suffered supply disruptions and saw ore grade fall at some of its biggest mines.

Source: Base Metals Listless