Base metals were higher on Friday. Copper rose 0.26 cents to close at $2.4919/lb. Nickel gained nearly 23 cents to finish at $7.5266/lb. Zinc climbed almost one penny, ending at $0.7530/lb. Aluminum added a cent and a half, closing at $0.7957/lb., while lead moved to $0.7880/lb., up a penny and a half from the previous session.
Copper is up 3.5% this week and 7.8% since June 1, but an abrupt reversal could be just around the corner.

China’s copper imports are slowing after record purchases, likely ending an 81% price rally this year, according to Sumitomo Metal Mining Co., Japan’s second-largest smelter of the red metal.

“Excessive imports mean much of the purchased metal was just stored, raising the risk that they may sell it back to the market and depress prices,” said Koichi Kaku, general manager at Sumitomo. “Imports may have exceeded manufacturing demand by as much as 1.3 million metric tons in the first half,” he continued.

Still, a few folks remain bullish on copper’s short-term prospects. One such analyst is Jim Lennon with Macquarie in London, who recently told Reuters:

“From a stocking perspective China is not going to be as big a factor but actually from a real consumption perspective… it’s going to be a lot stronger. We don’t see an easing up in Chinese demand.”

Time will tell who is correct, but we’re betting on a short- to medium-term downward correction followed by a huge run-up when inflation kicks in.

Source: Base Metals Higher

Last 5 posts by Doug Casey

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• Resource Stock Roundup:Friday, July 24th, 2009 - July 24th, 2009