Metals bounce back on gains in equity market

Print this page Posted on : 11-22-2008 by recycleinme.com

London, Nov. 21

Base metals rebounded sharply from overnight lows on Friday on higher global equity markets and a fall in the dollar against the euro. The metals may struggle to retain their momentum, as was largely driven by short-covering and overall the gains were modest, traders said.

At 1128 GMT, three-month copper was trading $20 higher at $3,500 a tonne. It fell to a three-year low of $3,375/tonne overnight. Aluminium rose $18 to $1,803/tonne, recouping half of the ground it lost on Thursday.

Zinc was up $10 at $1,190/tonne, lead was $10 higher at $1,195/tonne, nickel gained $216 to $10,166/tonne, while tin rose $325 to $11,600/tonne.

Stocks gain

Inventories for aluminium, copper, tin and nickel rose substantially on Friday. Traders said aluminium inventories may surpass 2 million tonnes by the end of the year, and nickel inventories may rise another 15-30 per cent to 70,000-80,000 tonnes.

Demand in spot markets for aluminium was very limited, and many market participants have large stocks of the metal, said a London-based aluminium trader at a commodity trading house. A nickel trader in London said producers and consumers will continue to deliver material to LME inventories, and a rebound in prices isn't likely until the first quarter of 2009.

Source : Business Line