Metals gain on hopes of solution to Euro crisis

Print this page Posted on : 10-22-2011 by recycleinme.com

Copper rallied on Friday as hopes of a solution to the Euro zone debt crisis and signs of stronger Chinese demand emerged, but the financial storm engulfing Europe and the resulting damage to demand meant caution prevailed. The positive mood was reinforced by German government sources, who said decisions on bank recapitalisations would be made at a eeting of European Union finance ministers on Saturday. Other industrial metals also gained. Aluminium on the London Metal Exchange gained 3 per cent to hit a session high of $2,149 a tonne, zinc rose nearly 5 per cent to $1,820 a tonne, lead was up more than 5 per cent to $1,884.75, tin rose more than 4 per cent to $22,100 and nickel nearly 5 per cent to $18,900 a tonne. Benchmark copper on the London Metal Exchange surged nearly 6 per cent to $7,126.50 a tonne after tumbling nearly 7 per cent on Thursday, its largest one-day fall since Sept. 22. The metal used in power and construction traded at $7,090 a tonne in official rings from $6,735 on Thursday when copper hit a two-week low of $6,710. SPLIT ON CHINA A plus for the diehard bulls was the volume of copper stocks in LME-approved warehouses. At 447,800 tonnes they are down nearly 6 percent since early October. Traders say much of this metal has gone to China and that there are more deliveries in the pipeline to the world's largest consumer of industrial metals. Weak manufacturing and below-consensus Chinese growth data in recent weeks have weighed on prices of industrial metals. Opinion is divided about copper demand growth in coming weeks and months, with some expecting China to escape relatively unscathed from global financial turbulence. Three-month aluminium was untraded in the rings, but bid at $2,136 a tonne from $2,085 on Thursday, zinc was bid at $1,810.50 a tonne from $1,740 and lead traded at $1,868 from $1,790. Tin traded at $21,850 from $21,200 and nickel at $18,725 from $18,025 at Thursday's close.

Source : Business Line