960418

Copper cuts gains, other

base metals lower

LONDON: After an encouraging start for the bulls on the LME the whole base metals complex fell back as an early sharp rise in copper faltered before the $2,600 a tonne target was achieved, traders said.

The Bundesbank rate cuts had little impact on the industrial metals with some traders, rather than taking the positive view, saying it showed how slow the German economy must be.

Three months delivery copper soared from $2,570 to $2,592 a tonne in early pre-market trade as speculative buying was encouraged by a break above the 100-day moving average at Wednesday's close.

But news of the end of a strike by workers on the Tazara railway, which carries the major proportion of Zambia's copper exports, saw copper falter before it achieved its $2,600 a tonne target.

This prompted a speculator-led sell-off back down to $2,582 before last business at $2,584, still up $14 from Wednesday. Traders said that if the market holds above $2,570 at Thursday's close, there may be a new try at $2,600, but a close below that level would trigger another wave of selling.

Nickel was another market where a constructive technical move looked like being shortlived.

Follow through speculative buying from Wednesday saw three months nickel reach $8,300 a tonne before the rise stalled, coinciding with an International Nickel Study Group forecast that 1996 would see a balanced market after recent deficits. Subsequent liquidation touched off sell stops which took the price back down to $8,120 before last morning kerb business at $8,130, down $155 a tonne.

Aluminium fell back with copper and traders also noted Commonwealth Aluminum in the U.S. said that new orders have slowed.

Three months aluminium ended the morning kerb at $1,606, down $3 a tonne, after earlier reaching $1,616 when copper was at its strongest.

Zinc was a thin market with the price being thrown around by light speculative interest which resulted in a range of $1,065 down to $1,050 before last at $1,052, down $15.

Tin briefly touched a target of $6,600 before the weight of trade selling and Far East speculator selling and profittaking took the price back to $6,545 and last at $6,560, down $5. Lead ended at $808, down $1, and alloy $1,365/$1,375, unchanged.-Reuter