Metals rally - should be up today16 May 2006Copper regains...

Metals rally - should be up today

16 May 2006

Copper regains bullish mood in price reversal: LME
Source: Dow Jones

London Metal Exchange three-month copper staged a strong finish to Tuesday's afternoon kerb, closing up 1.7% on the previous PM kerb price, following a day of thin but bullish interest, market participants said.

European trading opened in a bearish mood with buying only coming to the fore following a large, 4,925 metric ton drawdown in LME copper inventories. Copper's reversal also triggered similar moves in the remainder of the complex; after an earlier pullback to $19,100/ton, nickel finished late kerb $495 higher at $20,445/ton. Zinc also staged a turnaround; rising off intra-day low's at $3,155/ton to finish late kerb at $3,470/ton.

Copper was at $8,320/ton at late PM kerb in London, up $140 on the previous day's kerb close and $525 higher than earlier intra-day lows. Prices moved higher still in after-market trade, touching an intra-day high of $8,405/ton.

Separately, LCH.Clearnet, which clears trades for the LME, has again sharply raised its initial margins for most LME contracts. UBS says the move is likely to increase volatility by reducing liquidity in the market by making it difficult for short position holders to retain their positions.

LME aluminium attracted some trade buying at lower prices seen earlier in the session but bearishness reversed in line with copper's move higher. Aluminium closed just shy of resistance at $3000/ton, up $19 at $2,970/ton.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb

Copper 8320.00-8325.00, Up 140.00
Lead 1222.00-1224.00, Up 22.00
Zinc 3470.00-3471.00, Up 56.00
Aluminium 2970.00-2975.00, Up 19.00
Nickel 20445.00-20450.00, Up 495.00
Tin 9000.00-9050.00, Up 25.00