What's Moving the Metals Market?

Technical effects were moving the market in various base metals Tuesday morning, according to a London trade source, who saw lead falling back slightly after its strong rise Monday. Lead was bid at $2,770/mt as of 0831 GMT, down from its previous close of $2,780/mt, but this followed a rise of $122/mt between Friday and Monday closes. Commenting on Tuesday morning's activity, he suggested a bit of profit taking was occurring, and also suggested a psychological motivator: "It's not natural for lead to be above aluminium in price." He also noted that lead's volatility was a draw for funds, which needed the volatility to make money. Nevertheless, aluminium remained below lead, bid at $2,755/mt as of 0831 GMT, slightly off from its $2,757/mt previous close. Copper, too, was being driven by what looked like technical forces, said the trade source. Copper was bid at $7,745/mt at 0831 GMT, above its previous close of $7,710/mt.

The trade source saw copper as a battleground between "two opposing forces, one long and one short", and commented: "Yesterday, the bulls won," prompting some short covering. Meanwhile, he noted, zinc, which went up Monday "on the back of copper," had fallen back on Tuesday morning to be bid at $3,450/mt compared with a previous close of $3,460/mt, which he attributed to profit taking. He predicted: "Technical people are running the day today." He also suggested that new money had come into the market, possibly prompted by the end of quarter-end book-squaring. North American alloy was being bid at $2,200/mt in premarket activity, seemingly attempting a higher level than its last bid of $2,215/mt on Monday, when the contract closed untraded. Meanwhile, the aluminium alloy contract was showing no bids and no offers, as of 0831 GMT. The contract closed untraded on Monday last bid at $2,190/mt.

Bids for tin have been settling slightly lower in Tuesday morning premarket activity, at $13,900/mt as of 0729 GMT, and $13,875/mt as of 0831 GMT, compared to a Monday close of $13,925/mt. Yet small moves seem in keeping with the metal's behavior, which saw tin rise $75 in the course of Monday, despite the more positive rises seen in other base metals. By contrast, nickel has been trading more definitely -- both up and down. As of 0831 GMT, the metal was bid at $36,000/mt, up from the previous close of $35,900/mt, but down intraday from earlier premarket activity which saw bids of $36,550/mt.


Updated: July 3, 2007





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