Metals - Copper softens on profit-taking as tin hits 18-yr high Tuesday, April 17, 2007 11:24:30 AM http://www.afxpress.com
LONDON (Thomson Financial) - Copper prices softened as investors took profits after last night's gains in Asia, and on hopes that supply disruptions caused by industrial action at the world's second largest copper mine in Indonesia will be less dramatic than expected. Rumours that demand from China, the world's largest importer of the metal, is set to flag also held prices down, analysts said. "Copper has been closing weak in London every evening, then being bid up in Shanghai overnight. We're seeing the market selling into that strength," noted John Kemp, an analyst at Sempra Metals. At 12.03 am, copper for three-month delivery stood at 7,725 usd per tonne, against 7,730 usd at the close yesterday The metal has pushed higher in recent days on expectations of industrial unrest at the Grasberg mine in Indonesia, operated by the US' Freeport-McMoran Copper & Gold Inc. Investors fear the strike could further tighten supply of the metal. Talks between Freeport-McMoran's Indonesian arm and workers at the mine today failed to avert industrial action planned for tomorrow, heightening already elevated supply fears. However, investors are hoping supply disruptions from the rally will not be as dramatic as originally feared. Meanwhile, analysts doubt the high levels of demand seen from China this year -- with imports of the metal hitting record levels in March -- are sustainable at current prices. "What China is prepared to buy at 5,000-6,000 usd is very different from what it is prepared to buy at 8,000 usd," said David Thurtell, an analyst at BNP Paribas. The market is now awaiting fresh direction before pushing higher, analysts said. "Certainly the market is in a bullish frame of mind, but it needs some positive news to give it momentum," said Kemp. In the longer term, analysts still see base metals well supported, with supply remaining tight across the complex and better-than-expected economic data from the US helping shore up demand expectations. The Commonwealth Bank of Australia said it has hiked its near-term forecast for copper, nickel and lead, citing tightness of supply and saying the booming economy has led to an unexpected durability in the buoyancy of metals prices "We have always believed that the strong economic environment would support metals prices at a very high level by historical standards, but have been wary about how long the extraordinarily high prices for copper, nickel and lead in particular could be sustained," the bank said. "However, the simple fact is that metals prices have been at higher levels for longer than we anticipated," it added. The strength of the global economy should ensure demand continues to hold up, the bank said, while supply remains tight among the base metals Meanwhile, tin reached an 18-year high of 14,680 usd, before falling back to trade at 14,600 usd, supported by strong fundamentals and continuing concerns over supply from Indonesia, the world's largest exporter of the metal. "The market is very tight and stocks have been declining since the beginning of the year," noted analyst Perrine Faye of BaseMetals.com Among other metals, nickel was at 46,700 usd, up from 46,200 usd, while zinc was at 3,522 from 3,500. Aluminium dipped to 2,820 usd against 2,822 usd yesterday, and lead fell to 1,985 usd from 2,005 usd [EMAIL PROTECTED] har/slj COPYRIGHT Copyright AFX News Limited 2007. All rights reserved The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News --------------------------------- Ahhh...imagining that irresistible "new car" smell? Check outnew cars at Yahoo! Autos.