WSJ:BASE METALS: LME Metals Mostly Lower In Asia; Copper Off Lows
By Arpan Mukherjee
Of DOW JONES NEWSWIRES
WELLINGTON (Dow Jones)--Base metals were trading mostly lower on the London Metal Exchange in Asian hours Wednesday, as concerns about the European debt crisis overshadowed improved consumer sentiment data from the U.S.
At 0507 GMT, LME three-month copper was at $7,529 a metric ton, down $111 from its previous close, on Friday. The red metal had slipped 1.7% to a low of $7,510/ton early in the session.
Helen Lau, a senior analyst at UOB KayHian, said copper isn't likely to move far either way ahead of the year-end, with most traders having taken to the sidelines.
U.S. consumer confidence hit an eight-month high in December, but analysts said an upcoming Italian bond auction and the European debt situation in general are having more of an effect on sentiment.
Base metals, used widely in construction and manufacturing, are sensitive to economic indicators, which provide cues to future growth prospects.
The response to Italy's bond auction later Wednesday will be a gauge of whether European banks are ready to buy distressed government bonds in the aftermath of the European Central Bank's cash infusion last week.
Lau said she expects copper to move inversely with the U.S. dollar for the next few sessions. She had earlier forecast the red metal's price to reach $8,000/ton in the first half of 2012.
Dollar-denominated commodities tend to weaken when the dollar strengthens, which makes them more expensive to holders of other currencies.
LME three-month aluminum was trading in a $9 range through the session.
Harbor Intelligence said improving market sentiment has supported aluminum prices, but funds continue to take profits from their record high short positions.
The house noted that the while LME canceled aluminum warrants--a proxy of the metal leaving warehouses--have soared to record levels last week, no buying or selling signals have been activated by its models.
"Try to avoid entering the market as much as possible for now," it said.
The following are LME three-month base metal prices at 0507 GMT and changes from the previous PM kerb:
LME 3-Mo Last Change %Change Prev PM Close
Copper $7,529.00 -$111.00 -1.5 $7,640.00
Aluminum $2,011.50 -$5.50 -0.3 $2,016.00
Lead $2,005.50 -$13.50 -0.7 $2,019.00
Nickel $18,450.00 -$55.00 -0.3 $18,505.00
Tin $19,300.00 +$5.00 +0.03 $19,295.00
Zinc $1,850.00 -$5.00 -0.3 $1,855.00
-By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com
