LONDON, May 10 - Copper was seen trading sideways on Thursday while nickel recovered after the previous session's losses as dwindling inventories supported prices, traders said.
"Demand has risen through the first quarter and buyers are holding off due to the high price levels," analyst John Meyer at Numis Securities said.
Copper prices have risen by nearly 30 percent this year and prices were a bit softer on profit-taking, Meyer said.
Copper for delivery in three months on the London Metal Exchange eased $60 to $7,960 a tonne by midsession, extending Wednesday's 1.8 percent fall.
"In the short term we expect copper to trade in a fairly tight range as investors try to detect which way the trend is headed," Fortis Bank said in a monthly report.
Nickel was at $50,000/50,100, up against Wednesday's last quote at $49,295/49,300. Nickel fell over 3 percent on Wednesday after hitting a record high of $51,800.
"It is more of a correction than a sea change," an LME floor trader said, adding some fund selling weighed on prices.
Tight LME copper inventories, industrial action and production difficulties could prevent a softening in the metal's price to below $7,500 in the short term, Fortis Bank said.
Stocks in LME warehouses fell by 1,650 tonnes to 144,050 -- their lowest level since the start of November 2006.
Credit Suisse said copper had the potential to spike to over $11,900 sometime in 2007. On May 11, 2006, three-month copper futures hit a record $8,800.
"With European and U.S. consumers now back in the market and supply disruptions returning as a theme, we are confident copper prices will stay strong in the second half," Credit Suisse said in a report. [ID:nSYD297342]
In Chile the national union, representing subcontracted workers at the world's top copper producer Codelco, blocked roads to the Andina division in conjunction with a national strike. The roadblocks had no effect on output, a Codelco spokesperson said.
Andina produced 248,000 tonnes of copper in 2006.
ALUMINIUM EXCITING
Aluminium fell $24 to $2,861, after trading up to $2,927 on Wednesday before easing by the close.
"There is a lot of open interest in aluminium options --17,000 calls for June at $2,900. Those are in the money and the delta hedging is bringing other options into play," an LME dealer said.
"But if the market starts to drift, the options boys will have to get out, so be prepared for an exciting ride over the next two or three weeks."
Option granters cover their exposure against the risk of those options being exercised through delta hedging -- buying and selling the base contract as it appears more or less likely that those options will be exercised.
Lead was up at $2,070 against $2,065, while tin was indicated at $13,895/13,900 down from Wednesday's last quote of $14,200/14,300. Zinc was up $15 to $4,075.
METALS PRICES BY 1210 GMT
Metal Last Net Change Pct Move
LME Cu 7925.00 -95.00 -1.18
SHFE Cu* 72720.00 -470.00 -0.64
LME Alum 2860.00 -25.00 -0.87
SHFE Alu* 20640.00 90.00 +0.44
COMEX Cu** 362.20 -5.35 -1.46
LME Zinc
豫公网安备41010502003434号