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LME copper ends sluggish

day firmer, nickel shines

LONDON: Copper prices rose on the London Metal Exchange (LME) on Tuesday in very slow conditions, although tight nearby spreads continued to create considerable uncertainty on the market.

Other base metals were flat to lower in thin volumes except nickel which ended the afternoon at $8,000 a tonne, up $140.

"The morning was dead and the afternoon continued in the same vein," said one trader.

Copper firmed on the pre-market on light broker buying, but Chinese selling capped the rise. Values drifted higher during the morning session on the LME before profit-taking emerged.

Three month copper futures ended the afternoon kerb at $2,436 a tonne, up $18 from Friday's close. The market was shut on Monday owing to a public holiday in the UK.

Cash reached a premium of around $130 over three month futures before edging back slightly in the afernoon. Hefty backwardations on nearby dates were deterring sellers for now.

"The market seems to be settling in a $2,410/70 range for now, but volatility could return around the June and July pricing dates," said one trader.

Cash/June was indicated at around $3 backwardation by the close while June/July was at $60 backwardation. Nickel was the day's star performer, rising $140 to the psychologically important $8,000 barrier by the close.

"It was speculative buying today rather than trade buying," said a dealer, adding that business was patchy.

Nickel's strength was attributed by some traders to management changes at the top of Russian nickel giant Norilsk. A company official said the shake-up could change the way the company sells nickel on world markets.

Norilsk's exports are seen as a key swing factor in the Western world's supply/demand balance.

Separately the International Nickel Study Group estimated Western primary nickel production rose to 59,400 tonnes in March this year from 52,900 in February.

Demand also rose to 76,400 tonnes in March from 72,500 tonnes in February. The data had little price impact.

Aluminium held in a narrow range in quiet conditions, shedding $7 by the close to $1,582.

Lead was slow, dropping $9 to $825, and tin fell $20 to $6,240 also in thin trade. Zinc was flat at $1,053 and alloy a shade weaker at $1,325/30 from $1,330/40.-Reuter