Weaker $ helps metals recover
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Copper prices fell nearly 4 per cent on Wednesday to a 19-month low of $6,120 a tonne as weak US manufacturing data reinforced worries about demand, traders said. Three-month copper on the London Metal Exchange was trading at $6,140 a tonne at 1506 GMT from $6,360 on Tuesday.
. Earlier, metals gain as the dollar weakened. "We see a bounce after the turmoil this week as we await the approval of the bailout plan," said analyst Mr Robin Bhar at Calyon. "I believe the plan will be passed, it would be an absolute shock if it didn't. If it passes we should expect a relief rally...But I don't think such a rally is going to be sustained," he said.
WHO CARES?
Supportive fundamentals news, including a strike at a copper-zinc operation in Canada and the shutdown of a US aluminium smelter, lent a tentative hand to sentiment, but analysts said that might be drowned out by hubbub from Washington. Union workers at Xstrata's Kidd metallurgical operations went on strike early on Wednesday after talks with the company failed to produce a contract agreement. "Who cares about supply problems when the demand's falling away," Mr Bhar said. The LME trader said the shutdown did not have much of an impact on prices as there is plenty of aluminium around. But lower prices could meet with a supply response, he said.
Aluminium, after touching an eight-month low on Tuesday, firmed $10 to $2,435/2,440 a tonne while nickel gained $200 to $16,000. Lead touched $1,730 a tonne, the lowest since August 19, while zinc dropped $10 to $1,670/1,690 while tin was $650 higher at $17,900/18,200.
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Source : Business Line |
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