Metal prices buoyed

Posted in Industry News on 8th October 2009

For the first time in months, base metal prices were buoyed in the pre-market announcements at The London Metal Exchange (LME) earlier this week. Theorists believe one such explanation for the positive change in fortunes could be down to the high price of gold against a weak US Dollar.

One of the main metals experiencing a change in fortune has been copper, which has seen prices stabilise as current stock has risen: "There have been consistent rises in copper stocks recently with consumers allowing unused material to come back into the warehouses", quipped one trader. "Coppers clinging onto movements in gold for dear life because right now there's not a lot else to support it", retorted another trader.

Despite the unexpected turn of events, traders are keeping an ever watchful eye on the market as it continues to be pressurised from a dominant warrant holder who has controlled 90% of the LME tin warrants since July this year. Market participants believe that with an almost monopolistic hold over the market, the warrant holder is pushing prices higher than the fundamentals would dictate.

With LME Week looming in just over a weeks time, traders are bracing themselves for more activity as market participants gather in London to discuss and sign 2010 contracts, which normally cause prices to rise or fall sharply in the penultimate week.

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