nickel rebounds strongly
Bargain hunting and stabilizing oil and gold prices resulted in a rebound for most London Metal Exchange contracts from Monday's lows.
LME nickel staged the strongest bounce, rising as much as 6.2% after warehouse stocks fell by 42 tons to 6,990 tons and canceled warrants – material earmarked to leave the warehouse soon – rose to 33.65% from 31.66%.
"After a few days of stock rises there seems to have been a step change in nickel, which encouraged support," a trader said.
LME three-month copper regained the 100-day moving average in the morning session to trade at an intra-day high of $7,610 a metric ton but pared gains in post-kerb trade.
"All metals were perkier Tuesday as oil and gold calmed down. Base metals held comparatively well, didn't break any important support levels and held their broad ranges," a trader said, leaving overall sentiment on a positive footing.
Oil prices slumped Monday after tension surrounding Iran's nuclear enrichment program appeared to ease, triggering large scale liquidation that knocked down other commodity prices.
However, many base metals' fundamentals remain bullish, such as upcoming copper mine workers' contract negotiations at Codelco and a possible strike at Teck Cominco Ltd.'s Highland Valley Copper mine.
"No one is going to shorten this market significantly," an analyst said.
Aluminium on the other hand fell further on follow-through selling from commodity trade advisory funds weighing the metal to a four-week low of $2,460.50/ton, close to support at $2,450.
LME lead held up to rise to an intra-day high of $1,308/ton.
"Fundamentals for lead have changed over the past couple of months after exports from China fell sharply. This has been evident in LME stock drawdowns that have pushed the price higher," an analyst said.
LME lead stocks fell by 1,625 tons to 71,500 tons Monday.
3 months metal (prices in dollars a ton) Bid – Ask, Change from Monday PM kerb
Copper 7550.00-7560.00 Up 100.00 Lead 1300.00-1305.00 Up 10.00 Zinc 3275.00-3280.00 Up 15.00 Aluminium 2461.00-2462.00 Dn 34.00 Nickel 29290.00-29295.00 Up 1790.00 Tin 8905.00-8910.00 Dn 120.00
AGM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
