Supply concerns and a weaker dollar breathed second life into the base metals rally over the past week, although sources say prices are unlikely to maintain current levels on fundamentals alone. Nickel was the standout during the week as continued tightness in the market drove up prices not seen since June, 2008.
Base metals ended Friday in positive territory, with nickel for 3 month delivery on the LME gaining 9.7% from a week earlier, three-month aluminum rose 6.9%, and copper was up 5.7% and tin and zinc each gained 4.9%. Lead contracts lagged the complex posting a meager 1.3% weekly gain.
The metals sector also saw some positive news from the Organization for Economic Cooperation and Development (OECD), which released its composite leading indicators for January, noting improvement in economic activity in the G7 countries and recovery in India and Brazil. “Economic activity is projected to continue to expand in China and Russia” the OECD said.
Some analysts are seeing more upside in their long term outlook for metals. “People are starting to discount the double-dip recession and the OECD came out with an improved report on their leading indicators for the entire world, so the biggest problem right now is the valuations” said Justin Lennon, analyst at Mitsui Bussan Commodities in New York. And who likes to pay full value? Who likes to pay retain prices in a recession?
Excerpts from American Metal Market. March 5th, 2010
Fatal error: Arrays are not allowed in class constants in /home/44/82/2018244/web/wp-content/plugins/widget-context/src/UriRuleMatcher.php on line 22