LONDON, March 28 (Reuters) - Copper held firm on Wednesday on expectations of
robust demand from China, despite U.S. Federal Reserve Chairman Ben Bernanke's
comments about the U.S. economy, while tin tumbled more than five percent.
Copper <MCU3> for three month delivery in the London Metal Exchange closed
at $6,655, down $25 from Tuesday, bouncing back from a session low of $6,602..
Mining shares like BHP Billiton <BLT.L>, Anglo American <AAL.L>, Xtrata
<XTA.L> all closed down between half a percent and 1.5 percent alongside with
main European FTSEurofirst 300 Index <.FTEU3>.
"Base metal prices came off after Bernanke's speech but held into positive
territory," said analyst Peter Fertig at Dresdner Kleinwort.
"It has been the mortgage equity driving the private consumption in the
U.S., which is no longer the case. This implies less possibilities to spend and
therefore negative for the U.S. economy."
In remarks to Congress, Bernanke said near-term prospects for the U.S.
housing market are uncertain and that developments in the subprime mortgage
sector have raised more questions. [nN28296872]
The dollar extended losses against the yen on Wednesday, in line with the
U.S. stock market's broad weakness, after Federal Reserve Chairman Ben Bernanke
said U.S. economic uncertainty has increased.
Fertig said rising demand for copper and supply tightness still squeezing
the market were supporting the prices.
Chinese refined copper imports hit their highest level in two years in
February and banks and brokerage houses like Barclays, Deutsche Bank and Numis
Securities has revised up their copper prices forecasts on strong demand seen
continuing.
TIN DOWN SHARPLY
Tin prices <MSN3>, started the day in the negative territory on profit
taking, extended losses after Bernanke's speech, plummeting more than 5 percent.
Three-month tin <MSN3> on the London Metal Exchange hit $13,800 at the
close against $14,595 on Tuesday.
Tin has gained around 20 percent this year on concerns about supplies from
Indonesia, the world's second biggest producer.
"There was reasonably good turnover on that today, people have been long
for a while and probably want to take profit," an LME trader said.
Nickel <MNI3> gained 1.8 percent to $43,400 against Tuesday's $42,600 and
lead <MPB3> was up 2.7 percent at $1,900.
"There are some market players that want to see the price higher ahead of
the end of the month," an LME trader said.
Nickel prices have dropped some 12 percent since its high of $48,500 in
mid-March, but concerns of further delays at the CVRD's <VALE5.SA <RIO.N>> Goro
project could limit the downside to prices. [ID:nSYD98819]
Many fund managers are evaluated at the last day of the month on how well
their investments performed and for some investors March is the end of their
financial year.
Dealers expected trading conditions to remain thin and volatile ahead of
April when fresh fund money is allocated.
Lead was also underpinned by tight supplies and Xstrata's <XTA.L> force
majeure at its Northfleet refinery in the United Kingdom, analysts said.
Aluminium <MAL3> ended at $2,750 and zinc <MZN3> gained $20 to $3,200.
