Copper rises 4%; zinc up on output cut

Print this page Posted on : 11-27-2008 by recycleinme.com

London, Nov 26

Copper rose almost 4 per cent on Wednesday after China, the world's biggest consumer of the metal, cut interest rates for the fourth time since September.

''China is such a massive consumer of metals, much more so than the United States and Europe,'' said Citi analyst Mr David Thurtell. ''If the US or Europe cuts rates it's positive but not nearly so significant as these Chinese cuts for base metals.''

London Metal Exchange copper for delivery in three months was at $3,790 a tonne in official rings from $3,695 a tonne at the close on Tuesday. The metal reversed earlier falls to trade as high as $3,840.5.

Industrial metals were also boosted by short-covering as investors who had bet on lower prices bought back their positions.

Response to fall

Output cuts by some producers in response to lower metal prices may also be starting to make an impact.

Zinc rose to $1,265 a tonne, after earlier jumping 5.1 per cent to a high of $1,310, from $1,246 at the close on Tuesday. Prices have dropped more than 40 per cent this year.

Nickel was steady at $10,425 from $10,500.

Aluminium traded at $1,780 a tonne from $1,810, lead was at $1,191 from $1,190, while tin was last quoted at $13,000/13,010 compared with $12,900/12,925.

''We may see a further bit of short-covering ahead of Thanksgiving and the month end,'' said Mr Leon Westgate, an analyst at Standard Bank.

Copper inventories in LME warehouses fell 875 tonnes to 286,350 tonnes, the first decrease since Oct. 20.

Source : Business Line