Copper, copper, wonderful copper Michael VaughanFriday, May 12,...

Copper, copper, wonderful copper

Michael Vaughan
Friday, May 12, 2006

COPPER continued its record-breaking run on the London Metal Exchange overnight, reaching $US8600 per tonne after pushing through $8000/t for the first time yesterday. Strong metal prices, however, failed to generate the enthusiasm seen earlier in the week, with trade at the big end of town fairly lackluster.



Gold rose 2.2% on the COMEX overnight, closing at $721.50 per ounce. This increase did little for gold stocks, with DRDGold the strongest performer of the larger golds, putting on 18c (8.5%) to close at $2.30 on no other news.

Lead was the only metal to post a loss on the LME overnight, shedding a modest 0.3% to close at $1307.50/t. Nickel put on 2.9% to close at $21050/t, zinc put on 4.5% at $3825/t and aluminium added 2.9% to finish at $3185.

On the copper front, Commonwealth Bank commodity strategist David Thurtell told Dow Jones Newswires the continued run of the red metal was becoming "silly" despite the tight fundamentals characterising the market.

"We suspect someone is scrambling to cover a very big short in a very thin copper market," Thurtell said.

"We hope they have very deep pockets."

Hindlaco subsidiary Aditya Birla Minerals picked the perfect day to begin trading on the ASX. Investors in the new copper float made a tidy 63.6% paper profit as shares in the new company closed at $3.19, up from the $1.95 entry price in the company's $300 million IPO.

The company expects to become the fourth-largest producer of copper in Australia from its Nifty copper mine in Western Australia's Pilbara region and the Mt Gordon mine in north-west Queensland. The company expects to produce 46,000t of the red metal in fiscal 2006 and 106,000t in fiscal 2007.

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