The base metals were mostly in the black on Monday. Copper started up in the pre-dawn and continued higher until the late morning, only easing a bit late, to finish at $3,7246/Ib, up nearly 6 cents.
Nickel nosedived at the open, bottoming in the first hour of trading before regaining some of the lost ground to close at $10,7048/Ib,down 13 1/3 cents. Zinc had a pair of sharp ups and downs, ending at$0.8418/Ib, up a third of a cent.
Aluminum traded choppily but with an upward bias, adding nearly a penny and a quarter, to $1.3241/lb., while lead soared in the morning hours but came off sharply thereafter, winding up with a gain of only a half-cent, at $0.8014/lb.
Copper and most of the other industrial metals were caught up in the commodities rally that resulted from the slipping dollar. Copper, rising to a three-week high, also benefited from signs of economic strength out of China.
China's industrial-production growth gained 16% in May from a year earlier. That was after advancing 15.6% in April, the country's statistics bureau reported yesterday.
Technicians noted that there was continuing technical short-covering carried over from Friday, after support in the July contract held above its 200-day moving average, at around $3.50.
Copper fought off a bearish supply/demand outlook from the International Copper Study Group. Global copper usage is forecast to rise by only 2% this year, the ICSG said, and the market will face a surplus of around 85,000 metric tons in 2008.
But on the supply front, Southern Copper's CEO says its Ilo smelter is running out of supplies and could be paralyzed if roadblocks at that Peruvian operation continue for much longer.
Protesters have shut access to the smelter and mine of Peru’s largest producer. The mine and smelter are still at work, but “won’t be able to make it much beyond this week,” the company says.
Meanwhile, lead stockpiles monitored by the LME rose 5.1%, to 83,325 tons, raising inventories to their highest level in nearly two years.
With the increases coming in Singapore, the exchange's largest Asian warehouse, that suggests “Asian demand is slowing a bit,” said David Thurtell, an analyst at BNP Paribas in London. “The market has become much better supplied now.”
Lead has fallen 31% in price so far this year. That may force smaller mines to close, which would help stabilize prices, Thurtell said. |
