RE: Price of zinc and copper today
Zinc scores fresh record high, copper firm
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Industrial metals rallied again in Europe yesterday after a tentative start, on renewed investor buying that took zinc to a fresh all-time high and added more than one percent to copper and aluminium prices.
Zinc, this year's top price pick, gained as much as two percent on Monday, eyeing fresh strikes in Peru, the world's third biggest producer of the metal which is used as an anti-corrosion coating for steel.
Benchmark copper futures ended open-outcry trade on the London Metal Exchange (LME) at $4 601 a ton, versus Friday's close of $4 541 after trading as high as $4 605.
Copper hit a new peak of $4 630,50 last Thursday before retreating slightly. The red metal, used widely in construction and electrical wiring, rose by some 40% in 2005 and has since gained another four percent.
The persistent rally has confounded many analysts, who in the past have relied heavily on supply and demand factors to predict price moves. While these are still a major driver, the overriding influence has been the massive inflow of new money from a widening array of investors.
But investors should be more selective about what commodities they buy and how, Citigroup Private Bank said.
Youssef Affany, managing director and head of investment counselling for Europe at the firm, told Reuters he was still bullish on commodities in the long run but had curbed his enthusiasm in the short term.
"While two years ago, I was coming out all guns blazing, over the short term I am a little more cautious and would be more selective," he said.
Stephen Briggs, analyst with SG Corporate and Investment Banking, said that by the end of 2005, investment in metals via the various commodity indexes may have been close to $5-billion to $6-billion.
"That would be equivalent to, say, 1,1 to 1,3-million tons of copper, or for the LME metals as a group...to about 10 days of consumption," he said in a weekly report.
"Particularly for markets mostly in physical deficit, this level of investment is far from insignificant."
Traders said volumes going through the market were not particularly impressive."Most of the people I speak to are really fed up with (the market). It is really down to the boys with the money and as long as they keep on buying it, who knows what will stop it," one said.
Three-month zinc rose $46 to a record $2 186 by the close despite news that striking workers at three Peruvian mines owned by Volcan said on Monday that they would go back to work but planned a new walkout next month.
The current strike at the San Cristobal and Andaychahua mines and the Mahr Tunel concentrator plant in Peru's central Andes, which began on Jan 19, has halted about 40% of Volcan's 500 000 ton-a-year zinc concentrates production.
Workers at Mexican miner Penoles zinc and lead mine also called off a threatened strike.
In a monthly outlook, JP Morgan said mine supply in zinc remained very constrained. "We expect the market to be in shortfall in both 2006 and 2007," the bank said, adding it had raised its price estimates across the entire time frame, in contrast to medium term price decreases for other metals.
Aluminium picked up from early lows to repeat last week's $2 430 17-year high. The metal closed at $2 429 versus $2 378 on Friday.
Lead followed zinc to a new contract high of $1 310 and closed $35 or 2,8% firmer at $1 306. Tin rose to $7 420 from $7 100/150 and nickel traded at $14 875 from $14 600.
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Published: 2006/01/24 Printer friendly:
Author: Reuters
Portfolio: writer
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