04.01.09
Metals Ease On Dollar Strength, Equity Losses (Dow Jones)
01 Apr 2009 11:05 GMT
BASE METALS: Metals Ease On Dollar Strength, Equity Losses (Dow Jones)
By Matthew Walls
DOW JONES NEWSWIRES
LONDON (Dow Jones)–Base metal prices on the London Metal Exchange eased
Wednesday as the dollar strengthened against the euro and European stock
markets fell.
The metals were mostly trading within recent ranges and will likely continue
to do so in the near-term, traders said.
At 1049 GMT, three-month copper was trading at $3,995 a metric ton, down $40
on the day.
Aluminum was $11 lower at $1,381/ton. Zinc dropped $19 to $1,300/ton, lead
fell $35 to $1,235/ton, nickel lost $150 to $9,700/ton and tin was down $50 at
$10,350/ton.
“I think the market is in for a bit of consolidation,” said a senior metals
trader in London, adding copper will likely range $3,800-$4,200/ton in the near
term.
Inventories for copper and aluminum both rose, adding pressure to the two
metals.
Market participants said they were monitoring developments at the Group of 20
developed and developing nations’ summit in London Thursday, although few
expected any concrete agreements would emerge that could significantly affect
markets.
Besides the summit, base metals may also react to U.S. ISM manufacturing
index and U.S. home sales data expected later Wednesday.
Analysts said the metals could retreat in coming weeks as they appear to have
rallied over the past month without a significant improvement in fundamentals.
UBS analyst John Reade said base metals have made gains even as freight rates
have declined, a warning sign for investors long on base metals.
“With economic activity profoundly weak it seems hard to make a case for
jumping into industrial metals at the moment and the freight indices are
another warning sign to us that certain commodities have run ahead of sensible
levels too soon.”
