Metal Minings News

Base metals were mixed today. The complex generally took negative cues from global equity and oil markets and the rising US$ as an excuse to book some profits. Industry news was modest and economic data was bearish. US January core consumer prices grew by a larger-than-expected 0.3%, taking the annual rise to 2.5%. The data give the US Fed slightly less scope to cut rates, though we suspect that the weakness in the real economy will over-rule inflation concerns. The latest instalment of this weakness in the real economy came with residential construction data released today. The data showed that US building permits fell 3% in January to their lowest level since 1991. US housing starts were very low again in January, after plummeting through 2007.

Copper was unable to make up losses incurred in Asia, ending down $40 at $8,150. The US housing data was shrugged off by the market, the data coming in exactly as expected. A relatively modest fall in LME stocks and ongoing Far Eastern selling did the red metal no favours. In industry news, Russian Copper Co, the country’s third-largest producer of the metal, announced
plans to invest at least $1.6 billion in the next four years to expand facilities in the Ural Mountains region. The company plans to build Russia’s biggest copper plant, capable of mining and processing 20 million tonnes of ore a year. The facility may then produce as much as 70,900 tonnes of copper concentrate and 5,000 tonnes of copper cathodes. Nickel ended down $100 at $28,100. Zinc fell more than 1% to $2,410. Far Eastern selling was carried over into London trading, but the grey metal found reasonable support at the $2,375 level. Lead was the standout, spiking in the kerb on fund buying. Having repeatedly held $3,130 during the morning, the price shot $100 higher as stops were triggered. The price ended $131 higher at $3,276. There were rumours of a large stock withdrawal in the next week or so. Aluminium rose marginally (up $10 to $2,882), dragged higher by copper.

The International Aluminium Institute said that daily average primary aluminium output in January rose to 70,000 tonnes compared with 69,700 in December and 66,400 in January 2007. Tin added $75 to end at $17,125. Stocks continue to fall, and we still like the price to get to $20,000 some time this year.

This entry was posted on Wednesday, February 20th, 2008 at 11:07 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.