By Leon Westgate The base metals are all higher this morning. The main reason for the rally appears to be due primarily to weather-related buying in China overnight, after severe snowstorms in parts of the country raised concerns over transport disruption. The buying seems to have caught some participants off-guard and subsequently triggered some bouts of sporadic short covering. Also in the background and supporting metal prices are the very solid US Auto sales figures which came in at 11.3 million units (annualized) – a bullish figure in our view. Aluminium traded limit up in Shanghai, with the heaviest Chinese snowfall in many years appearing to spark memories of the weather-related chaos seen in early 2008. So far there are no reports of any production issues, with Chalco announcing that output has been unaffected by the snowfall. Nevertheless, the metal has continued to perform strongly on the LME during the morning and heading into the afternoon, building on yesterday’s strength, with steady speculative buying activity being a key feature of the market throughout Tuesday and into Wednesday morning. Trade sitting at the comfort of home. Start with a mere 50$ Copper also saw decent volumes overnight with further SHFE-LME arbitrage-related buying coming into play. The red metal has climbed back above $7,600 for the first time since late-august 2009, with the move coming on the back of decent turnover, and despite striking workers at Chuqicamata voting in favour of a new pay deal and $24,000 bonus. Lead has been the strongest performer so far however, with what looks like stops being triggered through $2590, helping to propel the metal through the $2,600 level. Decent volume has built up however, with lead trying to consolidate its gains heading into the afternoon. Elsewhere, the other metals are all higher, albeit on the back of pretty average turnover. In other news, Cia Minera Antamina has approved a $1.29 billion expansion of the Antamina copper-zinc mine in Peru. The project is expected to be completed by end-2011 and is expected to result in a 31% increase in copper and zinc concentrate output. The life of mine will also be extended by 6 years to 2029. Meanwhile, Indonesia’s 2009 tin exports were 94,500 mt, compared to 67,000 mt in 2008.

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