FBS: METALS-Aluminium claws back from 7-yr low as Wall St bounces
Aluminium bounced from a seven-year low and copper higher as Wall Street clawed its way back from the previous day's slump, but grim U.S. economic data kept sentiment sour.
U.S. stocks scrambled back from 12-year lows hit the day before, up about 1 percent, and shrugging off data that showed consumer confidence plunged to a record low in February..
Aluminium for delivery in three months on the London Metal Exchange fell to $1,279 a tonne, its lowest since November 2001, before rising to $1,323 at 1557 GMT from $1,288 on Monday. Copper was higher at $3,282 a tonne from $3,231 at the close on Monday.
"When we test fresh lows there is always a bit of a bounce back up, with technical buying," said VTB Capital analyst Andrey Kryuchenkov, adding that the modest recovery on Wall Street helped to lift metals.
However analysts were still cautious given the grim economic data pointing towards further deterioration in the economy.
U.S. home prices plunged at a record pace in December, data showed on Tuesday, while consumer confidence also hit a record low in February as Americans feared an already deep recession was likely to get even worse.
"Things will be pretty horrible through Easter at least," Alex Heath, head of base metals trading at RBC Capital Markets, said. "Business is very sporadic at the moment, and while most of the bad news is already in the price, metals continue to follow the ebb and flow of the macroeconomic outlook."
COPPER DEMAND CROPPED
Inventories of industrial metals in LME registered warehouses have jumped massively as slowing industrial activity across the globe has slashed demand for metals.
LME warehouse inventories of aluminium -- used in transport and packaging -- leapt by 13,125 tonnes to stand at a record high of 3.17 million tonnes, having risen more than 35 percent since December.
Stocks of copper, used extensively in construction, rose 1,950 tonnes to 544,700 tonnes, the highest since October 2003.
In Japan, production cuts by carmakers have hit demand for copper. An industry official said factories were shutting for a longer period during the week due to low demand for copper products.
In China, low prices and slumping demand have forced the central government to buy metals as reserves, part of Beijing's plans to support smelters during the current slowdown.
The State Reserves Bureau (SRB) has called a meeting in Beijing on Wednesday to buy refined zinc from smelters, its second purchase in less than two months, sources from smelters said on Tuesday.
Talk of SRB buying to boost reserves and the "very tight availability" of copper scrap should underpin the prices, analysts said.
Zinc was unchanged at $1,098 a tonne. Key stainless steel ingredient nickel rose to $9,765 from $9,550 a tonne.
Battery material lead dropped to $1,015 from $1,020, and tin firmed to $10,550 from $10,405 a tonne. Metal Prices at 1558 GMT Metal Last Change Percent Move End 2008 Ytd Percent
move COMEX Cu 144.50 1.05 +0.73 139.50 3.58 LME Alum 0.00 -1288.00 -100.00 1535.00 -100.00 LME Cu 3275.00 44.00 +1.36 3060.00 7.03 LME Lead 1005.00 -15.00 -1.47 999.00 0.60 LME Nickel 9650.00 100.00 +1.05 11700.00 -17.52 LME Tin 10450.00 45.00 +0.43 10700.00 -2.34 LME Zinc 1094.00 -4.00 -0.36 1208.00 -9.44 SHFE Alu 11460.00 -120.00 -1.04 11540.00 -0.69 SHFE Cu* 26550.00 -730.00 -2.68 23840.00 11.37 SHFE Zin 10105.00 -125.00 -1.22 10120.00 -0.15 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Manolo Serapio Jr. in Manila; Editing by Keiron Henderson)
