LME base metals end firm

News Digest

Base metals, barring aluminium and tin, closed higher Tuesday on the London Metal Exchange on near-term supply constraints and strong US services sector data, traders and analysts said today.

After remaining a laggard during the recent metals' rally, benchmark 3-month LME copper futures closed at $7,175 per 1 tn Tuesday, up $175 over the previous close.

Analysts said after a series of weak U.S. economic data, reports that the country's services sector showed positive growth in November provided some upside support to copper prices.

Institute for Supply Management's ISM index for non-manufacturing activity in the US rose to 58.9 from 57.1 a month earlier. Sentiments were further boosted by a 325-tn drop in LME copper inventories.

Nickel prices hit a new high of $34,500 per 1 tn Tuesday on critically low stocks at LME warehouses and hopes of the nickel market remaining tight in 2007 and 2008, a Mumbai-based analyst said.

The 3-month aluminium hit a new 6-month high of $2,851 per 1 tn before slipping to $2,840 before the day's close on reports of a 100-tn rise in stocks at LME registered warehouses. In addition, zinc stocks Tuesday rose 925 tn at LME monitored warehouses.

Analysts said the base metal complex is seen choppy in the near-term onlack of definite price triggers. The market, especially copper, is eagerly awaiting the outcome of the ongoing labour contract renewal talks at Codelco's Norte division in Chile.

India's crude basket slips 54 cents to $61.82 per barrel

India's crude oil basket Tuesday eased by 54 cents per barrel to $61.82 (2,752 rupees), the petroleum and natural gas ministry said in a release today. India's crude basket eased following a marginal drop in international crude oil prices.

Crude oil for January delivery on the New York Mercantile Exchange Tuesday closed 1 cent lower at $62.43 per barrel as traders await the weekly US petroleum inventory data due later today.

International crude prices have been hovering around $63 a barrel amid talk that the Organization of Petroleum Exporting Countries may cut output as supply outpaces demand.

High international crude prices pushed up Indian crude oil basket prices just after the government announced a cut in petrol and diesel prices last week. Petrol prices were cut by Rs 2 per litre and diesel by Re 1 per litre.

This is the first cut in oil product prices in the last two years. In June, oil marketing firms had raised petrol and diesel prices by Rs 4 per litre and Rs 2 per litre respectively, as crude prices increased to over $67 a barrel.

Gold drops nearly $5

Gold reversed early gains and dropped nearly $5 on Wednesday after better-than-expected US service sector data countered signs of slower growth and triggered a rebound in the dollar. Silver paused for breath after rallying to a six-month high of nearly $15 on Tuesday.

The metal is prone to sharp price fluctuations because of thin liquidity, said dealers. Spot gold on the Tokyo Commodity Exchange, currently October 2007, fell 32 yen per gram to 2,383 yen ($20.74) to track declines in New York's COMEX market. The dollar was little changed at 114.85 yen.