The base metals were all splashed with red on Friday. Copper cratered during the pre-dawn hours, and was still at its lows after the noon hour, but it staged a late rally that took it back to finish at $1.4519/lb., down only 2 cents.

Nickel was down all day long, barely coming off its intraday low to close at $4.2502/lb., down more than 17 cents. Zinc fell in the pre-dawn hours, rallied into the afternoon, but then lost it all and ended at its intraday low of $0.4785/lb., down a penny and a half. Aluminum was also a daylong loser, giving up a penny and a third, to $0.5736/lb., while lead plummeted to $0.4553/lb., down 2½ cents.

Copper posted another weekly decline, as skyrocketing stockpiles served as a stark indicator of global economic weakness.

Inventories monitored by the LME surged 17,350 metric tons yesterday, to 545,600 tons, a more than 5-year high.

The build in inventories “took some support away,” wrote Michael Widmer, an analyst at BNP Paribas in London. “In addition, purchasing managers in Europe were very weak. There are also concerns over economies in Eastern Europe.”

Norddeutsche Affinerie AG, Europe’s largest copper refiner, also alluded to the “unwillingness of investors and copper processors to take risks.” No surprise there, of course.

In Shanghai, copper inventories fell 11% from a week earlier to 30,105 metric tons. This was the first decline since mid-January, but back then stockpiles were just half the current level.

The International Copper Study Group said yesterday that the global copper market showed a supply surplus of 47,000 metric tons in November 2008, compared with a surplus of 38,000 tons in October.

The ICSG also reported that, for the first nine months of 2008, the market saw a production surplus of 147,000 metric tons, only slightly higher than the surplus of 143,000 tons during the same period of 2007. World refined copper usage in the first eleven months of 2008 increased by 2.6%, or 421,000 tons, year-over-year.

In company news, Brazilian mining giant Vale (NYSE:RIO) said on Thursday its net profit more than doubled in the fourth quarter as cost controls, production cuts and a weaker local currency helped it offset weaker demand for metals.

But miner Anglo American (NASDAQ:AAUK) suspended its dividend for the first time since World War II and announced job cuts, saying it expects weakness in commodity prices to continue.

Source: Base Metals Bleed

Last 5 posts by Doug Casey

• Resource Stock Roundup:Monday, July 27, 2009 - July 27th, 2009
• Base Metals Higher - July 27th, 2009
• Crude Continues to Climb - July 27th, 2009
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• Gold Pushes Through $950 - July 27th, 2009