BASE METALS: Copper Up 2.9% As LME Metals Close Higher
November 18 2010 - 1:17PM
Dow Jones News
Base metals closed higher on the London Metal Exchange Thursday,
reversing some of their steep losses from recent sessions as part
of a broad rally across the commodity markets.
LME three-month copper ended the day up 2.9% as the euro rallied
against the dollar and concerns eased over euro zone sovereign debt
and a potential interest rate hike in China.
Precious metals, oil and soft commodities all traded higher
throughout the day.
The base metals were boosted in Europe's mid-afternoon trading
hours by an upbeat report from the Federal Reserve Bank of
Philadelphia, which announced its November index of general
business activity came in at 22.5, from 1.0 in October. It had been
expected at 4.5. Analysts said the figures are particularly
positive for copper, which is used widely in the manufacturing and
construction industries.
Meanwhile bargain hunters, and interest from investors who felt
the recent selloff had been too severe, also helped propel the
metals higher.
"We had opined that the selloff was looking too severe and it
would appear that the lower numbers did attract good buying
interest," Barclays Capital analyst Gayle Berry said.
But market participants said the metals remain volatile--with
many labeling the move higher merely a relief rally--and warned a
deeper correction could be on the cards in the sessions ahead.
"We expect prices to remain vulnerable to macro vagaries in the
short term, so further pullbacks cannot be ruled out," Berry
said.
While macro events are expected to drive price direction,
investors continue to eye developments at Chilean copper mine Dona
Ines de Collahuasi, where a labor strike has entered its 14th day.
The company, which presented an improved final offer late
Wednesday, said output from the operations remain normal
though.
The mine is one the biggest copper mines in the world and is
owned by diversified mining companies Xstrata PLC (XTA.LN) and
Anglo American PLC (AAL.LN), each with a 44% stake. A consortium
led by Mitsui & Co. (MITSY, 8031.TO) holds the remaining
12%.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 8425.0-8426.0 Up 235
Lead 2315.0-2316.0 Up 51
Zinc 2185.0-2186.0 Up 72
Aluminum 2308.0-2309.0 Up 32.5
Nickel 21840.0-21850.0 Up 290
Tin 25100.0-25200.0 Up 355
Aluminum Alloy 2195.0-2205.0 Up 35
Aluminum Alloy-NASAAC 2270.0-2280.0 Up 45
-By Rhiannon Hoyle, Dow Jones Newswires; +44 (0)20 7842 9405;
rhiannon.hoyle@dowjones.com
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