By Leon Westgate
It was a mixed day price-wise for the base metals on Monday. A combination of a weaker dollar, stronger equity markets and positive US ISM data helped the metals recover during the afternoon.
The effect was not universal however, with nickel and tins both coming under sustained pressure throughout the day, ignoring the rest of the base metals. This morning has seen prices pick up across the board, with stronger equity markets and a stable dollar appearing to dissuade shorts from being too aggressive. After a slow start, volumes are pretty strong, particularly in copper.
Nickel was very poor on Monday with the metal failing to stage any concerted attempt at a recovery, in spite of the strength elsewhere. The main reason for the lack of enthusiasm appears to be due to reports that Xstrata has reached a tentative agreement with workers at its Sudbury operations. Prices have recovered this morning, heading back towards yesterday's opening levels.
Copper had a remarkable turnaround in fortunes on Monday with a weak start giving way to a very strong afternoon. A combination of a weaker dollar and positive US ISM data appeared to be the main drivers behind the rally in copper, triggering some short covering activity.
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Prices again had a shaky start this morning, coming under pressure in Asian trade, before rallying strongly heading into the afternoon, stalling just shy of $6,900. Very good volumes have again been a feature of the market with over 9,400 lots trading on LME Select by 13.30 UK time.
Lead and Zinc essentially spent Monday following copper, albeit with zinc seeing a more sustained short covering episode during the afternoon. Both metals have continued to track copper today.
Aluminium recovered late-on Monday with copper’s recovery and stronger US equities helping to shore up prices. Unlike copper, this morning has seen aluminium trade sideways rather than moving significantly higher, with the metal hovering around $2,100.
