Jul 25, 2011 (Dow Jones Commodities News via Comtex) -- --LME close mostly lower amid broad risk aversion
--3-month aluminum ends 1.1% higher at $2,619.50/ton, supported by technical buying
--Copper down 0.2% at $9,655/ton
By Francesca Freeman
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Base metals closed mostly lower on the London Metal Exchange Monday, with only aluminum managing to shrug off broad-based risk aversion to end the day in positive territory.
At the PM kerb close, LME three-month aluminum was 1.1% higher at $2,619.50 a metric ton after hitting a near-six-week high of $2,624/ton in earlier trade. Flagship copper closed 0.2% lower at $9,655/ton.
Aluminum's second consecutive close above $2,600/ton Monday signifies a technical breakout and should trigger further gains, said analysts. However, if the uptrend falters, the metal could be vulnerable to declines through $2,451/ton, said Sucden Financial analyst Brenda Sullivan.
Copper, on the other hand, remained stuck in range in quiet trade Monday, although early losses were pared somewhat later in the session.
"There has not been much change in the technical structure of the market over the last few days, with prices still hovering on the top side of the trading range," said MF Global analyst Edward Meir in a note. "The ongoing strike at Escondida is offering a measure of support, as is the slight decline in LME stocks noted today."
Striking at BHP Billiton Ltd.'s Escondida copper mine in Chile continued for a fifth day Monday, amid failed talks between a union members and the company's management over contract demands.
Escondida, the world's largest copper mine, stands to lose some 3,000 tons of copper output for every day workers are on strike.
Inventories of copper held in LME warehouses fell 1,125 tons metric tons to 471,200 tons Friday, after hitting a one-month high of 474,050 tons last week.
Appetite for perceived risky assets, such as commodities and stocks, took a hit Monday after U.S. congressional leaders failed to reach an agreement over raising the nation's debt ceiling Sunday and Moody's Investors Service slashed Greece's debt rating to Ca, a cut above default.
Additionally, the Chinese government over the weekend stated its intention to stick to its currency economic policy, suggesting that monetary policy is likely to remain tight. The news hurt sentiment toward base metals, which have a range of end-uses in construction and manufacturing and benefit from economic growth.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Friday PM kerb
Copper 9655.0-9660.0 Dn 19
Lead 2675.0-2675.5 Dn 14
Zinc 2468.0-2470.0 Dn 26
Aluminum 2619.5-2620.5 Up 29.5
Nickel 23800.0-23805.0 Dn 150
Tin 28125.0-28150.0 Dn 170
Aluminum Alloy 2388.0-2389.0 Up 18
Aluminum Alloy-NASAAC 2570.0-2580.0 Up 35