Base metals saw mixed trade in low volumes on the London Metal Exchange (LME) on Thursday, with copper softer and investor attention switching to zinc and aluminium, dealers said. Aluminium bounced off earlier lows to end $23 higher at $2,470 a tonne. Prices had dipped to $2,415 in pre-market dealing.
"Speculative attention is switching to zinc and aluminium. The funds are losing interest in copper despite attempts to prop up the market in recent days," Sempra Metals economist John Kemp said.
"Zinc is looking tight and will probably be the next metal that speculators try to ramp up," he said. Zinc prices have jumped over 25 percent since the start of the year and hit a record peak of $2,420 last month. Zinc closed at $2,370, up $50.
"The only price that seems to be sustainable is zinc", one trader said. The cash/threes spread for zinc moved into $4.00/8.00 backwardation from Wednesday's contango. Copper fell to $4,930 from $4,950.
"Some buyers came in covering short positions. People tried to pick up what they thought was cheap metal but could not push it through on the upside," a dealer said.
Dealers said trade had been choppy and market direction was still unclear. World refined copper production exceeded consumption by 2,000 tonnes in 2005, against a deficit of 887,000 tonnes in 2004, the International Copper Study Group (ICSG) said in its latest monthly bulletin on Thursday.
World refined copper output in 2005 was 16.433 million tonnes, while consumption totalled 16.431 million, the Lisbon-based ICSG said. "The evidence of a small surplus suggests that the cycle has turned and you should be seeing a negative move in prices," Maqsood Ahmed, analyst at Calyon said. Lead closed $18 lower at $1,160 after some large investors reduced their exposure, dealers said.
Tin edged higher to $7,900 from $7,865, while nickel fell to $14,825 from $14,850.
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