The latest mega-deal between Freeport-McMoRan and Phelps Dodge appeared to re-instill some confidence into the copper market on Monday, in turn aiding the base metals complex as a whole. Aluminium had had a dull and patchy morning up to the time we signed off and things barely improved over the afternoon. However, prices were steadier after the morning's low of 2610, as values picked up as far as 2675 on consumer buying and speculative interest from range-traders, eyeing the hold of the 100- and 200-day averages for a corrective bounce higher.
Nearby contangos tightened up somewhat around the December prime date, with Dec20-21 rated at 1.00b and Dec21-22 at 0.50b (both from Level). Dec27-Jan17 came in to 5.50c from 8.00c. Forward backwardations steadied by $0.50-$1.50 to the end of 2009.
It was another dreary session on Tuesday morning, volumes totalling no more than 619 lots to the end of the premarket, prices ranging between 2636 and 2657. IAI production data were interpreted as 'mildly bearish' last night, while this morning's LME stocks increase did little for the market's bulls. In a daily report Cliff Green Consultancy saw nearby resistance c. 2660/70 and again c. 2750, with only a clear break above there capable of improving the immediate technical (negative) tone, they said. Last at 2650.
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