SOMETHING'S "UP" IN THE BASE METALS: We find it interesting
that one by one, the most basic of all industrial inputs, base
metals, are rising in price rather than falling. Nickel prices,
for example, have risen from below $4000/metric tonne toward
4,700. The lows were made in October of last year and again in
early December. There are reports (as yet unsubstantiated) that
Inco Ltd. is considering cutting back its production, while we
read that Falconbridge is considering the same... as long as
Inco moves first! We would be more impressed with nickel's rise
if it were co-extensive with a move toward backwardation in the
LME futures, which would indicate that demand too was
increasing. For now, we shall simply not that nickel prices are
up nearly 20% in price in only a matter of a few weeks....
something that those who watch only the CRB might not be aware
of. The same is developing in the Zinc market, with prices
closing above $1000/metric tonne for the first time since last
September. Lead is also acting modestly bullishly, moving from
a low of $460/metric tonne only a month ago to $510 presently.
Before we get to carried away with rising base metals, it should
be noted that copper remains bearish and that aluminium remains
bearish also. When all of the base metals are rising, then our
interest shall be piqued, and our concerns for the bond market
heightened. For now, call it interesting information on the
periphery of the capital markets.... ammunition to be used
later.
Source THE GARTMAN LETTER
WEDNESDAY, FEB. 10, 1999 Fax: 757 238 9546
|
