http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=11f41f67-7529-406d-89e8-2f4df1b9f7ce
Metals - Copper up but others stall amid uncertainty over demand outlook UPDATE
Fri, Jan 11 2008, 11:06 GMT
http://www.afxnews.com
(Updates prices, adds details)
LONDON (Thomson Financial) - Copper edged higher although not all the other metals followed suit amid mixed calls on the demand outlook, with traders weighing a worsening US economic outlook against expectations for aggressive rate cuts ahead.
Fed chairman Ben Bernanke said in a speech yesterday US economic prospects for the year have worsened and that the central bank stands ready to "substantive additional action" to support growth.
The comments sent the metals up off day lows as players bet the Fed will cut rates by at least 50 basis points, thus cushioning the US economy and preventing a severe slowdown in metals demand.
"Overall the battle now seems to be between the current weak growth outlook and how much growth will actually recover as a result of the central bank intervention," said BaseMetals.com analyst William Adams.
He added that after a generally strong week in the base metals, he expects to see some consolidation ahead.
At 10.46 am, LME copper for 3 month delivery was up at 7,247 usd a tonne against 7,190 usd at the close yesterday.
Analysts said the metal was benefiting from expectations copper stocks are set to fall going forward. Stocks held in LME warehouses fell by 375 tonnes today and by a large 1,100 tonnes yesterday, taking inventories below the 200,000 tonne mark.
Copper has also been supported by renewed Chinese buying interest from the start of the year, which has seen the price bounce in recent days.
"The apparent strength in Chinese metals demand is consistent with the still healthy levels of Chinese industrial activity," said analysts at Goldman Sachs. "The rise of China has dramatically reduced the importance of the United States to global metals demand."
Weakness in the dollar is also providing a boost, as commodities traded in the US currency become cheaper for overseas investors.
In other metals, lead was up at 2,575 usd a tonne against 2,570 usd, while tin climbed to 16,375 usd against 16,300 usd.
Nickel was down at 28,300 usd against 28,700 usd, zinc was little changed at 2,405 usd against 2,400 usd while aluminium dipped to 2,479 usd against 2,490 usd.
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