20000125

LME copper down on long liquidation

LONDON: London Metal Exchange (LME) copper finished lower on Monday, pushed down by liquidation of short-term long positions, traders said.

"Copper is having a clear-out of longs. It has been a similar position across the board, but in smaller volumes," said a dealer.

Three-months copper pierced past support at $1,900 to end at $1,891.50 a tonne, $27.50 down on Friday's close.

A 17,350 tonne increase in LME copper stocks, propelling them to an all-time high of 803,225 tonnes, triggered a sell-off in the pre-market, knocking $8 off the copper price.

In a recent report SalomanSmithBarney warned that holding copper supplies equal to more than one to two weeks of demand would cap the price.

But traders said they saw Monday's drop as a minor movement which did not alter the contract's upward slant.

Next support was seen at $1,880 a tonne.

In other news Chilean mining group Antofagasta Plc said it expects its new $1.36 billion Los Pelambres copper mine to produce around 246,000 tonnes of contained copper this year.

Aluminium dropped $11.50 to end at $1,716.50 with traders attributing the fall to a technical correction.

"Aluminium has underlying strength," said one dealer.

On Monday Norsk Hydro signed an agreement to acquire U.S. extruder Wells Aluminium Corp, adding 75,000 tonnes to Norsk Hydro's current output of 35,000 tonnes per year.

The addition of Wells to the Norwegian company's six other extrusion operations in the U.S. will make it the fourth largest aluminium extruder in North America.

Nickel ended at $8,495, shaving $35 off Friday's close.

Lead had a quiet day, holding steady at $478 while zinc fell $17 to finish at $1,191.

Tin finished at $5,920/5,930, $40 down. The market was adopting a wait and see approach to events in Indonesia, where civil tension threatens production in the world's second largest producer.

Aluminium alloy was last quoted at $1,440/1.450, $11 down.

Silver was last indicated at 520/523 cents an ounce compared with 519/524 cents on Friday.-Reuters