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Rises across the base metals complex on the London Metal Exchange have left
markets short, meaning further short-covering buying can be expected Friday,
especially in tin and lead, which rose, respectively, 2.85% and 3.21% on
Friday. In premarket activity, tin was bid at $15,500/mt at 0841 GMT, already
up from the previous close of $15,350/mt. Lead was bid at $3,440/mt at 0841,
compared to its previous close of $3,340/mt. "These are big numbers already,
and fundamentally are very firm," a trader told Platts, indicating further
rises in the day ahead apart from the short covering. Meanwhile, with regard
to copper, which has been underpinned and boosted by actual and threatened
supply disruptions, he said: "The market is definitely short." Copper was bid
at $8,060/mt, at 0841, compared to the close on Thursday of $7,970/mt, a 1.13%
rise, on top of the 1.85% rise seen during the course of Thursday.
The trader confirmed that there had been short covering in nickel on Thursday,
but said he did not believe all the short covering activity had been shaken
out of the market yet. Nickel was bid at $34,400/mt at 0841 GMT, up 1.32%
already from the previous close of $33,950/mt, itself a 3.66% day on day rise
from Wednesday's previous close. However, he described the current situation
as a "flip round" from the metal's "massive fall", and although this had left
shorts exposed, he did not believe a rise was justified fundamentally. "It's
correcting an oversold situation," he observed. In other premarket activity,
bids for zinc rose from the previous close, and were at the level of
$3,635/mt, at 0841 GMT, compared to a previous close of $3,570/mt. Primary
aluminium was bid at $2,854/mt at 0841 GMT, compared to a previous close of
$2,832/mt. The aluminium alloy contract had no bids at 0841 GMT. It closed
untraded on Thursday, with the last bid during kerb trading at $2,215/mt.
The North American aluminium alloy contract was bid at $2,220/mt at 0841 GMT,
compared to a previous close of $2,235/mt. In a generally bullish indicator,
the popularity of commodities seen on Thursday -- as investors were spooked by
reports on subprime debt and inflationary fears -- was still visible in gold
on Friday morning in Europe. The yellow metal's price was indicated higher in
London morning trade, holding on to the steady gains notched up this week.
Spot gold was bid at $675.85/oz at 0929 GMT Friday, up from its late New York
spot price of $675.50/oz and higher still from its Thursday afternoon fix in
London at $674.50/oz.
This commentary was first published in Platts Metals Alert. If you
have any feedback about this commentary or want to find out more about
Platts Metals products and services, please contact webeditor@platts.com.
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