Metals – Copper edges lower as stocks rise, the week´s modest recovery subsides
Copper edges lower as stocks rise, the week’s modest recovery subsides LONDON (AFX) – Copper edged lower as the modest recovery in prices seen over the past few days ran out of steam and as the LME reported another gain in stockpiles of the metal. At 12.41 pm, LME copper for three-month delivery, which earlier hit a high of 5,950 usd, fell to 5,820 usd against 5,879 usd at the close yesterday
“After such a strong upward move there’s bound to be some retracement,” said Numis analyst John Meyer
Copper prices rose both Tuesday and yesterday as consumer buying emerged, notably from China, and as traders returning to the market following the New Year break bought into the dips
Copper lost around 12 pct of its value in the first week of the year as other commodities like oil plummeted and as market participants speculated that funds were exiting the commodities complex
However, the metal has since recovered somewhat. “Copper appears to have bottomed out and this will be confirmed once resistance at 6,300 usd has been breached,” said UBS Investment Bank analyst Robin Bhar
He noted overnight news that Chinese imports of copper rose again in December, continuing the trend observed in November. Bhar expects the trend to continue over the coming months
Separately, the LME said in its daily report that copper stocks held in its warehouses had risen by a hefty 1,625 tonnes to a total 195,450 tonnes. Overall copper stocks remain at their highest levels since March 2004
Elsewhere, nickel rose to 33,400 usd a tonne against 32,500 usd while zinc edged up to 3,750 usd against 3,740 usd
The recovery in the two metals has been particularly encouraging to traders betting on price rises, especially given that as recently as Tuesday’s close, zinc was down over 17 pct from the start of 2007 while nickel was 11 pct lower. In other metals, aluminium was up at 2,736 usd a tonne against 2,710 usd at the close yesterday, tin rose to 10,625 usd against 10,450 usd while lead fell to 1,576 usd against 1,600 usd
