DJ LME Review: Metals Surge As Fresh Fund Allocations Flow
Thursday, July 6, 2006 4:53:04 PM
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DJ LME Review: Metals Surge As Fresh Fund Allocations Flow
LONDON (Dow Jones)--London Metal Exchange three-month copper surged 6.6%
Thursday, reversing days of lackluster trading as the fresh fund allocations
predicted for the beginning of the new quarter finally began to flow, traders
and analysts said.
Copper spent the morning trading within a relatively thin $150 metric ton
band before fund buying gathered momentum in the afternoon, pushing prices to a
fresh intra-day high of $7,885/ton just prior to late kerb. Copper finished
late kerb just shy of those levels at $7,850/ton, up $485, or 6.6% on previous
kerb levels.
"I think finally we're beginning to see the new money coming in," said one
trader, referring to earlier predictions of an influx of fresh fund money timed
to correspond with the start of the month and quarter."It got off to a quiet
start but I think now there are hints now of it coming in," he said.
The remainder of the metals followed copper higher, with LME three-month
nickel pushing to a fresh contract highs and zinc recording the steepest
intra-day gains after copper.
Nickel topped yesterday's contract high Thursday with a close at a fresh
record of $23,545/ton, up 3.5% on previous PM kerb levels. Prices are supported
by a huge backwardation, traders said, which attracted the first "much needed"
stocks into LME warehouses Thursday after months of ongoing stock declines.
"The nickel market is very tight and it's going up which has really been the
trigger for them all to come up today," another trader said.
Zinc jumped 4.1%, or $135 to $3,385/ton at PM kerb. Sentiment for the metal
has been bolstered by consecutive days of drawdowns in material from LME
warehouses, traders said. Stocks fell another 225 tons to 212,550 tons,
Thursday.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 7850.00-7860.00 Up 485.00
Lead 1030.00-1035.00 Up 20.00
Zinc 3385.00-3390.00 Up 135.00
Aluminum 2599.00-2600.00 Up 124.00
Nickel 23545.00-23550.00 Up 795.00
Tin 8550.00-8575.00 Up 225.00
Aluminum Alloy 2340.00-2350.00 Up 50.00 Aluminum Alloy-NASAAC
2365.00-2375.00 Up 70.00
-By Emily Parkinson, Dow Jones Newswires; +44 20 7842 9410;
emily.parkinson@dowjones.com
(END) Dow Jones Newswires
07-06-06 1253ET
Copyright (c) 2006 Dow Jones & Company, Inc.