Profit-taking knocks metals in kerb trading
Friday February 13, 12:45 pm ET
LONDON, Feb 13 (Reuters) - Base metals were knocked down during
Friday's London Metal Exchange (LME) kerb session as profit-taking swept the market, although
the long-term trend for further gains remained intact, traders said.
In earlier rings, copper lead the way, hitting an eight-year peak, while lead reached a 7-1/2
year-high. In other metals, aluminium managed a four-year peak, zinc was at its highest for three
years, and tin touched levels unseen for 7-3/4 years.
Such high levels attracted some pre-weekend profit-taking by the close, especially as New
York financial markets are closed on Monday for a public holiday.
"I think people were concerned that things were getting a bit overcooked, particularly with
the States closed on Monday," a trader said.
The dollar, which had weakened earlier on Friday to just below an all-time low against the
euro, rebounded after a wave of profit-taking in the single currency.
"The euro eased, which also had a dampening effect, but copper would need to lose more like
$200 a tonne to say the trend is reversing -- the longer term trend remains up," he added.
However, traders said that steep dips would be bought despite profit-taking and corrective
sales.
Copper (MCU3) peaked at just under $2,730 in early afternoon trading, with kerb ring business
ending at $2,691 an $11 loss from Thursday's kerb.
"The market appears comfortable around $2,700 and we think this will stabilise in the coming
sessions," the trader said.
Analysts earlier noted that the market was ripe for a correction, as the current rally had
added more than $700, or nearly 40 percent, to prices in just over two months.
"...any correction we think will come in the form of a short period of consolidation, rather
than a price fall," Ingrid Sternby of Barclays Capital said.
Fundamentally, copper's supply worries were further deepened by overnight news that Indonesia's
Batu Hijau mine, Asia's second-largest copper miner, will reduce output of copper-in-concentrate
by between five and 13 percent this year.
Aluminium (MAL3) was unchanged at $1,720, and may now consolidate between $1,710 and $1,730.
Forward producer selling emerged in recent sessions, keeping prices in check.
In other metals, nickel (MNI3) eased $50 to $15,400.
Zinc (MZN3) lost $5 to $1,097, but lead (MPB3) was $8 higher at $855. Tin (MSN3) was last
indicated at $6,710 -- a high last seen in August 1995 versus a previous $6,620. |
