Base metals higher

Base metals were higher by the close of trade on the London Metal Exchange (LME) on Thursday, but sentiment remained fragile on concerns about global growth, traders said. "This is the top end of the ranges and I think we will see things lower tomorrow. The sentiment is down, and in the next two or three months we will see metals lower," one trader said. "I think by the end of the year copper will be down to $2,700 (a tonne) and aluminium down to $1,500," he added.
Sentiment is entering an uncertain phase, as there is a perception that the industrial metals bull-market cycle is about to turn. However, the market will remain susceptible to periodic upside price spikes, as inventories are not notably high.
"The base metals complex is in the midst of a crisis of confidence with a slew of data showing a slowdown in global growth being reinforced by a marked fall in freight rates," Barclays Capital analyst Ingrid Sternby said in a report.
"Given the scale of the recent liquidation and with support for most of the complex being under severe pressure, then further short-term weakness can be expected," she said.
However she pointed out last year base metals prices reached their low for the year in mid-May before recovering on Chinese buying interest, renewed confidence in the global growth outlook and seasonally-stronger consumer demand in the US and Europe.
Copper, which fell to its lowest since mid-April on Wednesday, bounced back to close at $3,175, up $30 from the Wednesday kerb close.
Aluminium closed at $1,776.50, $9.50 up from the previous kerb on the back of a stronger copper market.
Nickel rose to $16,000, up $350, and inventories remained near their lowest since July 1991.
Analysts said the tightness stemmed in part from a 718.6 percent rise in Chinese nickel imports from Russia in the first quarter of the year, which otherwise may have gone into stocks.
The cash/threes backwardation was at $750/800, its widest since the early 1990s.
In other metals, zinc was quoted at $1,254 versus $1,248, lead at $930, up $6 while tin was at $8,000/8,025 from $8,000.