NEW YORK (TheStreet) -- Base metals are expected to trade higher Thursday, notching up gains of close to 1% during the early trading hours after the dollar index fell 0.7%.
Metals could be pushed to multi-month highs if the dollar declines further on a widening trade balance and increasing initial jobless claims.
Economic data due for release Thursday include initial jobless claims for the week ended Oct. 9 which are estimated at 450,000 vs. the prior week's figure of 445,000. The September Producer Price Index is seen at 0.2%, below the earlier month reading of 0.4%. August's trade balance is forecast at a negative $44.5 billion, compared to a negative $42.8 billion recorded in July.
China's trade data released Wednesday boosted investor confidence and reinforced the view that despite the global slowdown, the country's growth is progressing on track, Bloomberg reports. China's trade surplus was $16.9 billion in September with exports gaining 25% and imports accumulating 24%, while foreign exchange reserves increased by $194 billion to $2.65 trillion, making it the largest holder of currency reserves.
Copper
Copper for three-month delivery gained 1.3% and extended a 27-month high to touch $8,470 per metric tonne on the London Metal Exchange as the dollar slumped to eight-month lows against the euro and 15-month lows against the yen. Copper inventories narrowed by 475 tonnes to 371,275 tonnes.
China's copper imports dipped 2.9% to 368,410 tonnes in September, the first time imports dipped in three months, due to lower domestic prices impinging on the appeal for overseas purchases, Bloomberg reports, citing the General Administration of Chain's Customs authority. On the other side, scrap copper imports for September increased almost 2.5% to 410,000 tonnes.
Southern Copper(SCCO), which closed at $40.30 on Wednesday, finds support at $39.49 and faces resistance at $40.95. Freeport-McMoRan Copper & Gold(FCX) closed at $99.08 with support and resistance at $97.05 and $100.52, respectively. Teck Resources (TCK) closed at $45.72 with support at $45.19 and resistance at $46.15.
Aluminum
Aluminum for three-month delivery gained 0.9% to $2,439 per tonne Thursday after being the only metal to post a loss in Wednesday's trading session. Inventories fell by 1,500 tonnes to 52-week lows of 4.32 million tonnes.
Kaiser Aluminum(KALU) announced Wednesday the purchase of assets of aerospace industry supplier Alexco for $90 million, Bloomberg reports. Alexco, a supplier of hard alloy extrusions, will provide a natural complement to Kaiser's current offerings of aluminum products for aerospace applications. The transaction, which is likely to close in December, will be paid from existing cash on hand.
