DJ LME Review: Up On Bullish Commodity Markets, Escondida
(Comtex Business Via Thomson Dialog NewsEdge) LONDON, Aug 21, 2006 (Dow Jones Commodities News via Comtex) --Base metal prices climbed Monday due to rising oil and gold prices and a weak dollar, while copper mine workers at Escondida rejected a sweetend contract offer.
The hardening of the negotiating fronts, with Escondida workers rejecting BHP Billiton Ltd.'s 4% wage rise offer and benefits totaling $32,000 per worker, moved London Metal Exchange three-month copper up in early trade to an intraday high of $7,620 a metric ton.
The rise prompted some long profit taking while LME stocks rose a net 1,150 tons to 122,950 tons, traders said.
However, the dollar approaching an 11-week low against the euro supported the market, and prices meandered around $7,600/ton for much of the day.
Afternoon trade saw technical short covering that produced the day's high at $7,692.50/ton.
"Escondida provided early firmness, but it's becoming an old story. People expect a settlement soon," a trader said.
A rise in the speculative short position on Comex to 108,700 tons, up 21,300 tons on the week pointed to growing concern of a slowing global economy, UBS said in a report.
Market participants will be looking to data on U.S. housing starts later this week for further signs of a slowdown in the U.S. economy, analysts said.
LME zinc rose sharply on the day, up 3.9% to an intraday high of $3,400/ton but remains within its recent range. Continual stock drawdowns continue to be supportive, traders said.
LME nickel firmed also, rising to an intraday high of $28,500/ton.
Chinese nickel producer Jinchuan Group Ltd. has expressed concern about excessive speculation on the nickel market while hedging only 10% of its output.
Last week the LME imposed a $300 daily backwardation limit after prices raced to record highs on a technical squeeze.
LME nickel stocks fell 330 tons to 5,826 tons but a decline in canceled warrants from 85.87% to 79.40% offset the outflow.
Overall trading volumes remained thin and prices stuck to well worn ranges. Upcoming contract negotations in September at Codelco, the world's largest copper producer, and were likely to provide fresh impetus to the market, analysts said.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Friday PM kerb
Copper 7650.00-7660.00 Up 170.00
Lead 1189.00-1192.00 Up 7.00
Zinc 3380.00-3390.00 Up 110.00
Aluminum 2480.00-2482.00 Up 11.00
Nickel 28445.00-28450.00 Up 470.00
Tin 8450.00-8500.00 Up 25.00
Aluminum Alloy not available
Aluminum Alloy 2215.00-2220.00 Dn 15.00
NASAAC
-By Elisabeth Behrmann; Dow Jones Newswires; (4420) 7842 9412; elisabeth.behrmann@dowjones.com
(END) Dow Jones Newswires
08-21-06 1305ET
Copyright (c) 2006 Dow Jones & Company, Inc.
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As of Thursday, 08-17-2006 23:59, the latest Comtex SmarTrend(SM) Alert,
an automated pattern recognition system, indicated an UPTREND on
06-26-2006 for BHP @ $40.83.
For more information on Comtex SmarTrend Alert, contact your market data
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