Base Metals Listless
Base metals were (mostly) slightly higher on Thursday. Copper gained 6.35 cents to close at $2.2069/lb. Nickel fell by nearly 2 cents to finish at $6.7139/lb. Zinc was little changed, ending at $0.6780/lb. Aluminum rose by nearly a cent, closing at $0.7014/lb., while lead moved to $0.7319/lb., up more than half a cent from the previous session.
Despite copper’s rise yesterday, there is renewed sentiment that Chinese demand (which boosted prices by more than half this year) will weaken as the slow seasonal consumption period approaches.
“The market is watching out for Chinese imports and stockpiles data and these will drive sentiment in the days ahead,” Jia Zheng, analyst at Southwest Futures Co., said yesterday.
“There is talk that around 100,000 tons of copper is making its way to LME warehouses in Asia in the next three weeks, and that is weighing a bit on sentiment,” said Jia.
China is expected to release preliminary trade data today or Monday, while weekly inventory data will be released by the Shanghai Futures Exchange after the market closes today.
In company specific news, BHP Billiton (NYSE:BHP), the world’s largest mining company, will begin a study for the potential sale of its Ravensthorpe nickel operations in Australia after closing the $2.2 billion project in January.
“BHP Billiton has received numerous expressions of interest from third parties regarding a possible acquisition of Ravensthorpe and will further test the market through this process,” the company said. BHP intends to finish an options study on the future of Ravensthorpe by December 2009.
BHP closed the Ravensthorpe nickel mine in Western Australia after nickel prices plunged. It sold the Yabulu nickel refinery in Queensland earlier this month to Australian billionaire Clive Palmer for an undisclosed sum.
It’s also worth noting that a Chinese firm started work on a copper deposit in Afghanistan yesterday as part of a multi-billion dollar project and the first major foreign investment of its kind in the country’s history.
State-owned China Metallurgical Group Corp (CMGC) and China’s top integrated copper producer Jiangxi Copper Co won a 2008 tender to explore and develop the vast Aynak Copper Mine south of the capital Kabul.
Aynak is thought to contain up to 13 million tonnes of copper and is regarded as one of the major ore bodies in the world.
The deposit was discovered in 1974 and surveyed by Soviet geologists in 1979, but has never been developed until now.
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