BASE METALS: LME Metals Mixed, Price Correction Seen

27th Jul 2010 11:57

By Rhiannon Hoyle Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Base metals are trading mixed on the London Metal Exchange Tuesday, with copper's price run having stalled and analysts predicting a correction more generally across the complex. The metals have rallied in recent sessions, underpinned by solid fundamentals and boosted Monday by stronger-than-expected U.S. new home sales figures. But LME three-month copper--which closed higher the past six days--was down 0.5% at 1028 GMT, at $7,112 a metric ton, as investors book profits amid ongoing economic uncertainty. Fairfax I.S. said the higher price levels seemed "unrealistic given ongoing concerns for economic recovery in the U.S., Europe and elsewhere." In a note Tuesday, Barclays Capital said there is likely to be a near-term correction, with prices having historically struggled to extend beyond six consecutive higher closes. "[But] bigger picture, we remain constructive," it said. BaseMetals.com analyst Will Adams said given the recent improvement in the technical and macroeconomic picture, the likelihood for further base metal gains is increasing. He suggests copper could potentially challenge $7,500/ton if it can form a base above $7,200/ton. The price of lead Monday also rose above $2,000/ton for the first time in two-and-a-half months, while tin hit a fresh 22-month high overnight, climbing to $19,800/ton at 0000 GMT. Traders said there was no one reason behind the climb, putting it down to ongoing concerns about supply, falling inventories and thin trading. But Fairfax warned aluminum, lead and tin prices may likely suffer a similar stall in their price run. Lead has already pulled back slightly, and now trades 0.5% lower at $2,004/ton. At 1028 GMT, tin was trading 0.5% higher at $19,500/ton and aluminum was 0.3% higher at $2,062/ton. In other metals, zinc was down 0.5% at $1,943/ton and nickel was up 0.1% at $20,827/ton. -By Rhiannon Hoyle, Dow Jones Newswires; +44 (0)20 7842 9405; [email protected] (END) Dow Jones Newswires July 27, 2010 06:57 ET (10:57 GMT)