Tin, nickel fail to match copper tempo

BASE METAL REVIEW

Copper prices are all set to come down as a Chinese State Reserve Bureau (SRB) trader Liu Qibing was arrested for allegedly creating large LME short position. The arrest may cool down speculative buying for the time being in China.

As of now virgin copper in Mumbai is moving in tandem with bullish international market. Copper gained Rs 500 per quintal in the last week across all sections but nickel dwindled by Rs 1,400 last week. Copper wire bar saw an unusual gain of Rs 1,800 per quintal intermittently in the last one and a half months to set the new record of Rs 24,700 per quintal in Mumbai.

In contrast, tin and nickel had nothing to cheer with as both sunk desperately owing to lack of investors interests. Tin slumped by Rs 2,500 to Rs 37,000 quintal while nickel remained the biggest loser, down Rs 5,200 to Rs 67,400 per quintal. Traders feel concerned with the current price rise in copper.

As this has hit regular business, the traders do not want to burn their fingers at this level assuming copper may turn "red" any moment. All big traders and importers have stalled their activities till price goes normal.

Despite Societe Generale's projection for copper to remain in surplus of about 1,50,000 tonne in 2006, the prices on the London Metal Exchange (LME) touched the all time high of $4450 per tonne on Monday in early trade. Industry observers warn that a minor supply slippage - noticed on Monday in Asian markets - could be enough to prolong the period of production shortfalls.

"Trades in virgin copper and scrap are totally stalled and they are preferring to wait and watch till the copper slips to affordable level of $3500 which could be possible any time as the the red metal has already reached the top from where only the decline is possible," said Rohit Shah, president, Bombay Metal Exchange.

Scrap prices are also following their virgin metal partner with a surge in copper heavy and light to Rs 22,500 per quintal and 21,700 per quintal, a gain of Rs 1,600 per quintal respectively. Copper utensil scrap jumped Rs 1,100 to Rs 19,400 per quintal while copper sheet cutting gained Rs 1,700 to Rs 21,300 a quintal in the period under consideration.

However, aluminium could not share the same fate as copper did since October 1st and managed to gain Rs 400 per quintal to Rs 10,600 per quintal while aluminium utensil scrap managed to surge Rs 300 at Rs 8,650 per quintal because of unprojected rise in global aluminium production by 72,000 metric tonne to 2.014 million tonne.

"Availability is the major criterian where the price plays a dynamic role. There has been no problem of aluminium supplies either in domestic as well as in the international marker. Therefore, aluminium has just managed to go in upward direction but not in tune with its red metal partner.

Despite India being self sufficient in aluminium production, international giants such as BHP Billiton and Corus Group PLC are separately reportedly seeking to set up aluminum manufacturing facilities in Orissa in order to exploit huge bauxite reserves in the state. If these companies succeed, India would be one of the largest suppliers of aluminium in the world," a trader said.

Moving in tandem with copper, a rising industrial demand from steel galvanizing industry lifted zinc price by Rs 1,600 per quintal to Rs 10,600 per quintal in one and a half months while lack of proper demand from industrial users lead attracted less activities to gain just Rs 250 to settle at Rs 5800 per quintal.