Jul 05, 2010, LONDON (Dow Jones)--Base metals on the London Metal Exchange ended mostly higher Monday in a quiet session as U.S. markets were closed to mark Independence Day.
The metals managed to retain some of the gains made in Asia at the start of the day, holding well against the bearish influences of softer European equities and a weaker euro.
Copper closed 0.9% higher at $6,469 a metric ton. It rose to a six-day high of $6,568/ton in Asia in intraday trading.
Nickel gave back early gains and dropped 0.7% on news that a nearly one-year strike at some of Vale's nickel operations in Ontario, Canada may be coming to an end.
Management and union negotiators at United Steelworkers Local 6500 and 6200 struck a tentative five-year labor agreement over the weekend. Union members will vote to ratify the agreement Wednesday and Thursday.
Vale's nickel operations in Ontario have been running at 50% of their total capacity of roughly 85,000 metric tons.
Societe Generale analyst David Wilson said the impact on prices was muted by comments from the two sides last week saying they were near an agreement.
Wilson estimated the Vale Ontario operations would produce between 30,000-40,000 tons in the second half of the year, putting a cap on prices until demand rebounds in the fourth quarter. "Nickel will probably struggle to get any upward traction for the next month or two."
Monday's quiet trading session on the LME gave traders little sense of near-term direction, so market participants will look to China to take the lead Tuesday, said a London-based trader.
Copper demand in Asia and Europe seems to be improving, though the broad global growth outlook remains poor, he said. "There does seem to be a demand for copper in Europe, and in Asia generally there's a lot more inquiries going around."