BASE METALS: Firmer On Equities, LME Tin Soars

London Metal Exchange base metals benefited from anuptick in global equities, lead by LME tin, although analysts said how long thesentiment will last remains unclear. U.S. equities were mixed after a strong start to the day by European stockindexes, after investors embraced the U.S. Federal Reserve's move to cut theintrabank lending rate Friday, However, analysts warned that the global credit crunch situation still has alot further to play out. "The Fed hasn't resolved the situation. They have merely facilitated fundingneeds...that just enables things to be managed in the short term," said analystRobin Bhar of UBS. "We don't know where the losses are or who holds them. This is going to dragon and people are going to see confidence being undermined and we're going tosee a drag on economic growth," he added. Under these circumstances, anotherrally in the base metals complex was difficult to envisage, he said. LME tin however spiraled higher Monday, clawing back almost half of lastweek's losses, around 8.5% before easing. The market was in a "knee-jerk reaction" as to Friday's news that majorIndonesian producer PT Timah said it would halt sales of tin to the cash marketuntil prices regain the $15,000/ton level. As a result, prices could be capped as selling emerges at this level,analysts said. Elswhere, LME aluminum remained close to 10-month lows, as market playerscontinue to be net short with electronic trading volumes month to date inAugust approaching record highs, a London broker noted. The current pace of trading activity provides "some evidence as to the amountof metal sold" and gives an "idea of how short the market is currently,"considering August is traditionally a month of slow demand, the broker said. LME nickel is proving relatively robust despite a recent spate of stockbuilds, with inventory inflows reflecting quieter U.S. and European physicalmarkets, said Barclays Capital. Lower regional premiums for nickel are due tostainless steel producers scaling back purchasing, the bank said. In other metals, LME zinc is seen in a short term range of $3,000-3,300/ton,while LME copper remains underpinned by supply issues in South America. Talks between Mexican miner Grupo Mexico SAB and the country's miners unionwere scheduled to resume Monday, while. Also, in Peru, three unions at Southern Copper's operations on Fridayrejected the company's latest offer. However, the unions postponed any strikeaction because of the earthquake that struck Peru last Wednesday. Prices in dollar a metric ton. 3 Months Metal Bid-Ask Change from Friday PM kerb Copper 7020.0-7025.0 Up 20 Lead 2928.5-2929.0 Up 38 Zinc 3075.0-3080.0 Up 5 Aluminum 2477.0-2478.0 Dn 18 Nickel 26100.0-26200.0 Up 100 Tin 14350.0-14400.0 Up 850 Aluminum Alloy NA NA Aluminum Alloy- 2162.0-2170.0 Unch (NASAAC)