WSJ:BASE METALS: LME Metals Mostly Gain; Copper Hits 3-Week High
--LME metals mostly higher, supported by equity gains and a softer dollar
--Recent better-than-expected Chinese and European PMI data also seen benefiting metals
--Anglo American reaffirms that it is not obliged to sell any Anglo American Sur shares to Codelco
By Francesca Freeman
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Base metals are mostly higher on the London Metal Exchange Tuesday, starting the year on a relatively firm footing amid equity gains and a softer dollar.
At 1104 GMT, LME three-month copper was 0.9% higher at $7,667.50 a metric ton. The red metal earlier traded at a three-week high at $7,703/ton.
"The markets opened the New Year on an optimistic tone with commodity and equity markets rising," Fairfax I.S. said in a report.
The greenback was lower versus the euro Tuesday, providing further support to dollar-denominated assets such as metals, which appear cheaper to other currency-holders when the dollar weakens.
Of particular benefit to base metals like copper Tuesday was recent purchasing managers' index data from China and Europe, which were better than expected in both instances, said analysts.
Economic data from top metals consumer, China, tend to be particularly closely watched by metal markets for demand signals and Chinese appetite for commodities "remains the big unknown" for markets this year, said Fairfax.
Meanwhile, traders and analysts also remain sceptical of base metal prospects in the medium term in light of ongoing debt contagion risk in the euro zone. However, Commerzbank noted the potential benefit of a recent build-up in short positions in metals like copper, should the mood regarding Europe improve.
"High levels of pessimism among financial investors have always been a good contrary indicator in the past: even a slight improvement in the market situation and sentiment can spark a sharp price rise in such a situation," the bank said.
In other news, Anglo American PLC (AAL.LN) Tuesday reaffirmed that it is not obliged to sell any Anglo American Sur, or AAS, shares to Chilean state copper giant Codelco. The miner received a letter from Codelco on Jan. 2 confirming its attempt to purchase up to 49% of the Sur complex under an option agreement.
In other metals, aluminum was 0.3% higher at $2,026/ton, zinc was up 0.2% at $1,848.75/ton, nickel was down 1.2% at $18,488/ton, lead was 0.5% lower at $2,024.25/ton and tin was up 0.8% at $19,350/ton.
