Metals recover in LME trade

Print this page Posted on : 12-09-2008 by recycleinme.com

London, Dec. 8

Base metals on the London Metal Exchange rebounded on Monday in Europe as dollar weakness against the euro and higher equities prompted buying.

However, traders and analysts said while short-covering rallies as seen Monday will continue, the overall poor demand environment will continue to pressure metals until the global financial markets begin to recover.

At 1043 GMT LME copper was trading at $3,258.75 a tonne, up 7.2 per cent from Friday's kerb close. LME aluminium was trading at $1,537/tonne, up 3.2 per cent. LME zinc was at $1,124/tonne, up 4.9 per cent. LME lead was at $1,004/tonne, up 3.5 per cent.

LME nickel was at $9,375/tonne, up 4.2 per cent. LME tin was at $12,050/tonne, up 6.2 per cent. The commodity complex as a whole was higher in Europe with gold and crude oil up. European equities were also trading up.

''The metals were looking oversold on a short-term basis, so a bounce was expected as the year end approaches,'' a London-based broker said. According to Commitment of Traders data released Friday, copper's net short position on COMEX on non-commercial contracts rose 10.1 per cent on the week to 17,722 contracts.

Fairfax IS said it forecasts base metals could recover some in the second quarter of next year as new government and investment funds flow into recovering industrial growth. Fairfax forecasts copper prices to average $3,500/tonne in 2009 and $3,800/tonne in the first half of 2010.

Copper stocks up

LME warehouse inventories continued to rise Monday with copper stocks up 3,425 tonnes and aluminium stocks up 8,925 tonnes, which will make sustained rallies difficult, traders said.

Source : Business Line