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Copper Closes 1.7% Higher On Euro, Short Covering

iconFeb 27, 2012 08:46
Source:SMM
Base metals closed mostly higher on the London Metal Exchange Friday, with industry bellwether copper lifted 1.7% by a strong euro and heavy short covering, market participants say.

Feb 24, 2012 LONDON (Dow Jones)--Base metals closed mostly higher on the London Metal Exchange Friday, with industry bellwether copper lifted 1.7% by a strong euro and heavy short covering, market participants say.

LME three-month copper ended the PM kerb at $8,530.50 a metric ton, up $140.50 on the previous close and well off an earlier low of $8,330/ton.

Metal prices were lifted as the euro rose to its highest level against the dollar since December, rallying after Greek cabinet members approved the details of a debt restructuring. The metals are priced in US dollars, and as such a stronger euro makes them cheaper for buyers using the single currency.

Following rather subdued trade early in the session, and a range-bound day Thursday, a flurry of activity sent copper above the closely-watched $8,500/ton level mid-afternoon in Europe. Traders attributed the move to the covering of a large short position, originally booked around $7,000/ton in mid-2011. Speculative players were also seen breathing life into the previously lackluster market, brokers said.

Aluminum outperformed heading into the kerb close and finished the session up 2.4% at $2,327/ton. Credit Suisse said in a note that aluminum prices are showing "considerable stickiness" near certain levels.

"We have now had a month of essentially sideways price action near the $2,200/ton-$2,250/ton region [and] although aluminium is on the whole the least volatile LME metal, movements among these levels tend to be very rapid, easily moving $100-$200 a ton within a few days," the bank said.

It says that while it expects the market to eventually break to the upside, shooting toward $2,400/ton following a rash of production closures, the direction of moves in the near-term remain uncertain and "can be exceptionally difficult to catch in progress."

Prices in dollar a metric ton.
3 Months Metal                Bid-Ask       Change from
                                          Thursday PM kerb
Copper                     8530.5-8531.0      Up 140.5
Lead                       2208.0-2209.0      Up 43.5
Zinc                       2079.0-2080.0      Up 31
Aluminum                   2327.0-2328.0      Up 54
Nickel                    20175.0-20180.0     Up 200
Tin                       23850.0-23855.0     Dn 340
Aluminum Alloy             2220.0-2240.0      Up 25
Aluminum Alloy-NASAAC      2320.0-2330.0      Up 40

 

copper

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