re: lme metals close prices With 2007 contract negotiations...

re: lme metals close prices With 2007 contract negotiations taking place in London as a sideshow to LME Week, traders were away from their desks and consequently the market was moving sideways, a trader said Tuesday. The London Metal Exchange complex was little moved in late morning trade Tuesday with only the bellwether copper contract and zinc showing any real momentum. Three-months copper was bid $40 higher on its previous close at $7,490/mt at 0935 GMT, while zinc was bid up $55 at $3,710/mt. "It's all a bit flat and sideways this morning. Most of the traders are in town in meetings discussing contracts for next year," the trader with an LME ring dealer said Tuesday, adding: "Most of the moves were made last week so those who negotiated their contracts early gained the benefit of higher prices. Very little has happened so far this week." Phil Roberts, technical analyst with Barclays Capital, favors the upside in copper but suggests that the market may have to wait some time.

"We await a breakout but for the time being, signs are few. As such, we prefer to stick with a sideways bias and target the $7,770/7,880/mt area in sessions ahead, above which would allow for a run up to the important range highs in the $8,110-8,150/mt area," Roberts said, adding: "Copper is correcting sideways rather than lower: only a meaningful move below $7,000/mt would signal $5,000/5,500/mt, until then upside risk is growing." Zinc stocks in LME warehouses continue to fall, down 1,025 mt Tuesday to 133,475 mt--less than a week's worth of global usage. There was further bullish news this week as ILZSG noted that it expects world demand for zinc to increase by 3.9% in 2006 and by 2.6% in 2007, offset by increases in production of 4.3% in 2006 and 4.9% in 2007. The study group also predicted that the zinc market would remain in deficit of 354,000 mt in 2006 and 154,000 mt in 2007. Aluminium was bid at $2,612/mt, off $8 overnight.

Resistance has been identified at $2,710/mt but Roberts suggested that a challenge of this leevl was not out of the question. "Consolidation above $2,618/mt would imply a test of $2,710/mt sooner rather than later this week," he said. Nickel, having achieved fresh highs of $30,300/mt Monday before being sold lower, has eased back to $29,900/mt, up $450 on its previous close. Lead was bid at $1,423/mt, up $11 on its previous close, while tin was bid unchanged overnight at $9,075/mt. The ILZSG said that it expects global demand for refined lead metal to increase by 3.3% to 8 million mt in 2006 and by a further 2.6% to 8.21 million mt in 2007, but despite this growth the group is forecasting a small global lead surplus in both years. Aluminium alloy was bid at $2,250/mt, down $30 on its previous close, while North American aluminium alloy was bid at $2,265/mt down $15.