Minneapolis Washer - Your Source for Current Steel Price Information

LME copper price rises to $3.15/lb

Metal had sold under $3 three weeks ago

Tom Stundza -- Purchasing, 2/17/2010 1:00:03 PM

World spot copper traded at $3.15/lb this week, the highest price this month, as a declining dollar has fueled demand for metals as alternative assets. Copper futures for May delivery averaged $3.24/lb on Tuesday on both the London Metal Exchange (LME) and the New York Mercantile Exchange's Comex unit.

The spot global copper price has fallen from $3.35 in January to $3.02 so far this month on speculation that budget gaps in Portugal, Italy, Greece and Spain could derail the global economic recovery. However, Bloomberg now quotes Michael Widmer, a strategist at Bank of America/Merrill Lynch Research in London, as saying that copper and other nonferrous metals futures have climbed in price as traders and investors are "less pessimistic" about Greece's budget deficit especially and have returned to higher-risk assets.

"Declines in metals this year are not really driven by metals fundamentals, but a broader macroeconomic environment," Widmer tells Bloomberg in an interview. Copper in LME warehouses is around 549,900 metric tons this week but Widmer says there has been a steady rise in bookings this month to remove 16,000 metric tons of the metal from warehouses registered with the LME-which signals growing demand from manufacturers.

Catherine Virga, senior base metals analyst with CPM Group in New York, tells Reuters that "we are seeing an uptick in physical demand across the base metals complex due to the lower prices."

Then there's China, the world's largest copper consumer. Copper demand is expected to grow by more than 11% in the first quarter.  "The demand picture out of China is still robust," analyst Dan Smith at Standard Chartered Bank in London writes to clients. "Once China comes back from the New Year holidays things will pick up and this price rebound is an anticipation of that." Chinese markets are due to reopen next week after this week's New Year break.

HIGHER MILL INPUT COSTS DRIVE STEEL PRICES UP IN NORTHERN EUROPE - MEPS

2-18-2010

Flat products in northern Europe recorded moderate price increases during the past month. The producers are seeking significant hikes, justified, they say, by their escalating input costs. Scrap has become scarce due to its relatively low value since the start of the recession. The upcoming iron ore contract negotiations are predicted to result in much higher values. However, price advances will be unsustainable without improved end-user demand and there are few signs of that at present. Weak consumption constrained the development of hot rolled plate selling figures, while shortages of some hot dipped galvanised items led to more positive adjustments for that product.

There has been little third party import activity. Demand has been solid in the domestic markets of China, India and Russia. Furthermore, price levels in Europe have not been attractive to producers from these countries.

Selling values for long products are more closely linked to the scrap market and, accordingly, rose more uniformly this month. Wire rod performed most strongly, on the back of perceived improvements in demand. Some suppliers have been unwilling to commit to long contracts as they predict further price advances. Purchases of merchant bars for manufacturing have not picked up to the same extent. Consumption of beams and rebar remains depressed as the ongoing harsh weather conditions hamper construction activity.

In February, alloy surcharges for 304 grade flat products from major European stainless steel suppliers increased by between €173 and €184 per tonne. Consequently, while there were moderate reductions to basis values, effective prices grew significantly.

Copper Jumps to Three-Week High, Zinc Surges as Dollar Declines

By Chanyaporn Chanjaroen and Millie Munshi

Feb. 16 (Bloomberg) -- Copper rose to the highest price in three weeks as a declining dollar fueled demand for metals as alternative assets. Zinc jumped the most in four months.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, dropped as much as 0.9 percent. Raw materials from oil to soybeans gained, and equities climbed. The correlation between industrial metals and the dollar has become increasingly negative, according to Dan Smith, a Standard Chartered Bank analyst in London.

“The dollar is a big driver for a lot of the commodities today,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “It’s helping the metals to skyrocket.”

Copper futures for May delivery climbed 13.75 cents, or 4.4 percent, to $3.2395 a pound on the New York Mercantile Exchange’s Comex unit. Earlier, the most-active contract touched $3.243, the highest price since Jan. 28.

On the London Metal Exchange, copper for three-month delivery gained $279, or 4.1 percent, to $7,144 a metric ton ($3.24 a pound). Zinc prices surged 6.2 percent to $2,337 a ton for the biggest gain since Oct. 8.

Metals prices also climbed as traders and investors returned to higher-risk assets after becoming “less pessimistic” about Greece’s budget deficit, said Michael Widmer, a strategist at Bank of America-Merrill Lynch in London.

Copper has fallen 3.2 percent this year in New York on speculation that budget gaps in Greece, Spain and Portugal may derail the global economic recovery. Yesterday, U.S. markets were closed for a national holiday.

Macroeconomic Drivers

“Declines in metals this year are not really driven by metals fundamentals, but a broader macroeconomic environment,” Widmer said today by telephone. A rise this year in bookings to remove metals from warehouses registered with the LME signals demand from manufacturers, Widmer said.

Industrial metals extended gains after a report showed manufacturing in the New York region expanded in February at the fastest pace in four months.

The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month, from 15.9 in January. Readings above zero signal growth. The survey of manufacturers in the region encompassed factories in New York and parts of New Jersey and Connecticut.

The report showed “a big jump, which is a very good economic sign,” Zeman of LaSalle said. “A lot of people are coming out of the woodwork and buying again today as they become more comfortable with what’s happening in Greece and the general economic picture.”

Aluminum, nickel, tin and lead prices also rose on the LME.

--Editors: Ted Bunker, Daniel Enoch.

METALS-Base metals rally to multi-week highs as dlr sinks

* Investors look at bullish stocks detail

* China demand still robust

* Regional U.S. manufacturing brightens economic outlook

By Chris Kelly and Pratima Desai

NEW YORK/LONDON, Feb 16 (Reuters) - Copper led a rally across the broader base metals complex on Tuesday, hitting its highest level in more than two weeks, as the dollar stumbled and markets recovered from last week's sell-off.

"I think we are still seeing some residual demand from last week," said Catherine Virga, senior base metals analyst with CPM Group in New York.

"We are pulling up from that correction. We are seeing an uptick in physical demand across the metals due to the lower prices."

On the London Metal Exchange (LME), aluminum peaked at $2,138 a tonne, its highest level since Feb. 3, and nickel soared to a seven-month high of $20,345 a tonne.

Copper for three-month delivery in London MCU3 closed at $7,144 a tonne, up from $6,870 at the close on Monday. The metal used in power and construction hit a session high of $7,138 a tonne, the highest since Jan. 28.

On the New York Mercantile Exchange's COMEX division, benchmark copper for March delivery HGH0 rallied 13.9 cents, or 4.5 percent, to finish at $3.2215 per lb, its highest level on a closing basis since Jan. 27.

The euro had its biggest one-day gain versus the dollar since the end of November, as traders bet the single currency had slipped too far over fiscal worries about Greece.

A weaker U.S. currency makes dollar-priced commodities cheaper for holders of other currencies.

Regional manufacturing data from the United States brightened the economic outlook and bolstered the bullish momentum in the metals, analysts said.

Demand growth for commodities has, for some years now, been led by emerging economies such as China, the world's largest consumer of industrial metals, which is expected to grow by more than 11 percent in the first quarter.

Chinese markets are due to reopen next week after this week's New Year break.

"The demand picture out of China is still robust," said Daniel Smith, an analyst at Standard Chartered.

"Once China comes back from the New Year holidays things will pick up and this rebound is an anticipation of that."

CONCENTRATION

Stocks of copper in LME warehouses stand at 549,900 tonnes, their highest since October 2003. That is a negative, but the market is looking at canceled warrants -- material already earmarked for delivery.

Copper canceled warrants at above 16,000 tonnes from 3,625 tonnes on Feb. 8 are mostly concentrated in Korea, and analysts say this material is probably heading for China.

Canceled warrants on aluminum are at 295,175 tonnes versus 256,550 on Feb. 8, a small number compared to stocks near record highs at above 4.587 million tonnes.

But in the context of financing deals, which have tied up much of aluminum stocks, they are significant, analysts said.

Aluminum MAL3, used in transport and packaging, closed at $2,131 a tonne from Monday's close of $2,054, while stainless steel material nickel MNI3 closed at $20,325 from $19,350.

Stocks of nickel fell to 164,856 tonnes on Feb. 15 from 166,356 on Feb. 10. Nickel prices over the same period are up about 10 percent.

Material tagged for delivery nearly doubled to 5,460 tonnes on Feb. 15, from 2,394 on Feb 8. Most of the new canceled nickel warrants were in Singapore.

Battery material lead closed at $2,298 a tonne from Monday's last bid at $2,180, jumping nearly 6 percent to hit an intraday high of $2,308.75, its highest in nearly a month.

Zinc MZN3 was at $2,337 from $2,200 on Monday, and rose over 6 percent to hit a late-session high of $2,346. Tin MSN3 was last quoted at $16,700/16,725 from $16,495. Metal Prices at 1953 GMT Metal Last Change Pct Move End 2009 Ytd Pct

move COMEX Cu 322.10 13.85 +4.49 334.65 -3.75 LME Alum 2137.00 83.00 +4.04 2230.00 -4.17 LME Cu 7145.00 275.00 +4.00 7375.00 -3.12 LME Lead 2285.25 152.25 +7.14 2432.00 -6.03 LME Nickel 20270.00 920.00 +4.75 18525.00 9.42 LME Tin 16700.00 205.00 +1.24 16950.00 -1.47 LME Zinc 2327.00 127.00 +5.77 2560.00 -9.10 SHFE Alu 16825.00 185.00 +1.11 17160.00 -1.95 SHFE Cu* 56410.00 1020.00 +1.84 59900.00 -5.83 SHFE Zin 18345.00 270.00 +1.49 21195.00 -13.45 * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Rebekah Curtis in London; Editing by James Jukwey; Editing by David Gregorio)

Inmet predicts ‘broadly positive' copper outlook, little new mine production

Inmet Mining asserts that copper is the most favored base metal this year "because of its strong fundamentals" especially if the global demand recovery gathers momentum.

RENO, NV - 

Toronto-based Inmet mining predicted Tuesday that, globally, very little additional copper production will come on stream this year "given the number of projects that were delayed during the economic crisis."

Inmet insisted, "The overall outlook for copper demand is broadly positive in 2010 and copper is the most favoured base metal because of its strong fundamentals, especially if global demand recovery gathers momentum in 2010.

 "The strong demand from emerging markets and pick-up in demand from developed economies, combined with tighter supply, are likely to keep prices above US$3.00 per pound," the company forecast in its 2009 financial report made public Tuesday. "We also expect continued investor interest to support the price through 2010."

Meanwhile, Inmet predicted that gold prices exceeding $1,000 per ounce should continue this year as investment demand continues to be gold's main price driver. "Even if economic indicators continue to recover and investors become more willing to diversify into risky assets, investment demand for gold is expected to be maintained as we see more visible signs of rising inflation."

As for zinc, Inmet suggested improving demand in end-use markets, "strong galvanized steel output in China, a continuing flow of funds and a balanced concentrate market are expected to limit the surplus of zinc along the supply chain and support prices in 2010."

Inmet forecast that its copper and zinc sales volumes will be higher this year due to higher production.  "We expect zinc production to increase because we plan to mine higher zinc grades at Pyhäsalmi in 2010."

In its analysis, the company said its own overall metal production was "fairly consistent" between 2008 and 2009, although copper production at the Çayeli copper and zinc mine in Turkey was down due to lower grades and gold production at the copper-gold mine Troilus in Quebec was down because of the processing of low-grade stockpiled ore. Zinc production was higher because grades at the Pyhäsalmi copper and zinc mine in Finland were higher.

Inmet reported a 4% increase in 2009 copper production from 80,500 tonnes in 2008 to 83,600 tonnes, as well as a 3% increase in zinc output from 75,400 tonnes in 2008 to 78,000 tonnes in 2009. Gold production last year declined 6% from 244,100 ounces in 2008 to 228,000 ounces in 2009. Pyrite production dropped 32% during the same period to 383,900 tonnes.

FINANCIALS

Net income for the full year of 2009 increased 24% from US$216.9 million or $4.49 per share in 2008 to $269.2 million or $5.14 share.

During the fourth-quarter 2009 net income rebounded 376% from a net loss of $32.5 million or negative 67-cents/sh in the fourth-quarter of 2008 to a net profit of $89.76 million or $1.60 per share a year later.

Earnings from operations were higher because of higher metal prices as copper and zinc prices increased fourth-quarter 2009 sales by $143 million. Meanwhile operating costs were $17 million lower during the fourth quarter of last year because Troilus is now only processing stockpiled ores.

Source: Mine Web

GLOBAL IRON AND STEEL PRODUCTION TO REACH A RECORD HIGH IN 2010

MEPS

2-8-2010

MEPS forecasts world steel output at 1350 million tonnes in 2010. This will be an “all-time” high figure and represents an increase of approximately 11 percent over the anticipated outturn in the previous twelve months. Blastfurnace iron production is also predicted to reach a record level in 2010. At 994 million tonnes, it would be almost 11 percent above the result a year earlier. Further significant gains are foreseen in 2011.

The last peak year for global iron and steelmaking occurred in 2007 at almost 947 and 1345 million tonnes, respectively. Our latest forecast for 2010 indicates that the return to past glory will take just three years. This compares with five years in the early 1980’s and eight years in the 1990’s.

The current short recovery period is almost entirely due to the economic stimulus packages put in place by the Chinese government. With China accounting for almost 50 percent of both supply and demand, strong activity in this country, will have a positive impact on the global steel scene.

The final figure for world steel output in 2009 is expected to be 1217.5 million tonnes - down by 8.2 percent, year on year. Blastfurnace iron production is predicted to have slipped to 896 million tonnes in the same period. This is 3.3 percent below the 2008 figure. Direct reduced ironmaking in 2009, at 62.3 million tonnes, will be an annual decrease of 9 percent.

Only four of the major producing countries in the world will post increases, year on year, for crude steel manufacturing in 2009. A substantial rise in Iran and modest improvement in Saudi Arabia will lead to gains in the Middle East. Substantially higher activity in the Chinese steel sector and steady progress in India will result in total Asian supply rising by in excess of 3 percent.

We predict output gains across all regions over the next two years. Double digit percentage increases are anticipated for most of the industrialised nations in 2010 as they partly recover from large reductions in the previous twelve month period. More modest rises are envisaged for the developing countries in the CIS, Africa, South America, Middle East and Asia.

The 2009 steel output in the EU-27 will be close to 138 million tonnes - 30 percent below the outturn in the previous year. Double digit reductions in steel manufacturing took place in all the nineteen producing member states. The mills in Belgium, Bulgaria and Sweden took the biggest hit with almost 50 percent decreases in output. Greece, Luxembourg and Slovakia were the least badly affected.

Raw steel production in the rest of Western Europe in 2009 will be approximately 29 million tonnes. This represents a reduction of almost 9 percent on the result in the previous year. The outturn for blastfurnace ironmaking will be marginally down, due to new capacity installed recently in Turkey.

Crude steelmaking in the CIS showed a mini revival in the second half of 2009 but still recorded a figure of below 100 million tonnes for the first time since 2001. The year on year decrease was close to 15 percent. Local demand in most countries of the region has started to pick up. We forecast blastfurnace iron and steel production in 2010 rising to 77.6 and 100.5 million tonnes, respectively - an increase of approximately 8 percent over the previous year’s figure.

The global recession had a major impact on the steel sector in the NAFTA region in 2009. Output fell by one third, year on year. The integrated mills took the biggest hit. Blastfurnace iron production fell by approximately 40 percent across the region.

South American steel production declined by just above 20 percent, year on year, in 2009. Both domestic and export demand fell dramatically as the global economic recession set in. On a positive note, output started to recover in the second half of the year. Further gains are predicted to occur in 2010 and 2011 in both iron and steelmaking. In fact, we forecast a new record high level of steelmaking in the region in the latter year.

Total African steelmaking in 2009 fell by approximately 20 percent, year on year. However, we predict a solid recovery in 2010 but it will be insufficient to reach the outturns in the period 2006 to 2008. In fact, it is likely to be several years before new record high levels are achieved.

Middle East steel production continued to prosper in 2009, despite the global economic crisis. Output will be an “all time high” at well in excess of 17 million tonnes. Further solid growth will occur in the following two years as new plants come on stream. Steelmaking should climb to near 20 million tonnes in 2011.

Crude steel output in Asia in 2009 was approximately 3 percent above the figure reported in the previous year. At over 790 million tonnes, this is a new record output and represents eleven consecutive years of growth. New all time peak values are forecast for 2010 and 2011. Most of the expansion of steelmaking has been undertaken, via the blastfurnace/oxygen steelmaking route. Consequently, pig iron production has also increased to reach a figure of approaching 675 million tonnes in 2009. This pattern will extend well into the future.

Source: MEPS - World Steel Outlook Quarter 4 2009

Copper Prices Climb on Speculation Demand Is Stable in China

By Millie Munshi and Claudia Carpenter

Feb. 8 (Bloomberg) -- Copper prices rebounded, halting a three-day slump, on signs that demand is stable in China, the world’s largest buyer of the metal.

Inventories of copper in Asian warehouses monitored by the London Metal Exchange dropped for a 12th consecutive session today, the longest decline since May. Before today, prices slid about 15 percent in three weeks on speculation that the global economic recovery will slow, curbing raw-materials demand.

“There’s been some pullback recently, but we’re focused on the long-term picture of strong physical demand from places like China, and we think we’ll still see strength in copper prices,” said Brian Hicks, who helps manage about $1.5 billion at U.S. Global Investors in San Antonio.

Copper futures for March delivery increased 4.05 cents, or 1.4 percent, to $2.898 a pound at 11:04 a.m. on the New York Mercantile Exchange’s Comex division. A close at that price would be biggest gain for a most-active contract since Feb. 1.

The metal also rose as traders who follow historical price patterns bought futures and the dollar slumped, Edward Meir, an MF Global analyst in Darien, Connecticut, said today in a report. He said the metal appeared to be “quite oversold” as the price fell to the lowest level in more than three months on Feb. 5.

The greenback sank as much as 0.4 percent against a basket of six major currencies, after touching the highest level since July last week.

‘Risk Aversion’

“We’ve been seeing some risk aversion and money moving to the sidelines recently,” Hicks said by telephone on Feb. 5. “It’s going to be volatile in the short term. Longer term, stronger growth in China is going to be quite constructive as they develop their infrastructure.”

The metal more than doubled in 2009 as supplies shipped to the Asian country climbed to a record in the first half.

On the LME, copper for delivery in three months rose $140, or 2.2 percent, to $6,420 a metric ton ($2.91 a pound).

Prices for copper in Shanghai are about 5 percent higher than LME contracts, after taxes, according to Macquarie Group Ltd. analysts. The gap may spur an increase in China imports, the analysts said.

“Chinese demand is still strong,” said Colin Hamilton, a Macquarie analyst in London. “It’s cheaper to buy” LME contracts, he said.

Aluminum, nickel, lead and zinc also rose on the LME. Tin prices fell.

--Editors: Ted Bunker, Patrick McKiernan.

Global nickel demand seen rising by around 7pct in 2010

Monday, 08 Feb 2010

MetalBiz reported that after three years' shrinkage, nickel metal demand will rebound in 2010.

Affected by the financial crisis, the nickel price in the beginning of 2009 considerably plunged more than 80%. By the fourth quarter of 2009, the price increased to USD 18,500 per tonne. Nickel metal price's decline, mainly is caused by the drop in demand.

In the first half of 2009, the nickel production came to a standstill. But with the pick up of the global economy in 2010, the nickel consumption volume probably increases. The nickel consumption in 2010 will increase by around 7%.

The stainless steel plate demand will rise in the following several years, which boosts the nickel consumption. According to the nickel demand expectation figure during 2010-2012, nickel metal price is estimated to keep steady.

The average nickel price in 2010 is expected to stay USD 20,000 per ton, till 2011-2012, it will continue jumping. The average nickel price in 2010-2012 is predicted to exceed USD 22,000 per tonne.

(Sourced from MetalBiz)

METALS-Copper up as U.S. data brightens demand outlook

* Dollar .DXY weakens against a basket of currencies * Copper stocks fall again, boosting sentiment

* Fears easing about Chinese monetary tightening

(Updates prices)

By Rebekah Curtis

LONDON, Feb 3 (Reuters) - Copper rose on Wednesday, as improving U.S. economic data boosted investors' confidence that OECD demand for industrial metals could start to pick up.

Copper for three-month delivery MCU3 on the London Metal Exchange was at $6,871.5 a tonne in rings from Tuesday's $6,820.

A broadly weaker dollar .DXY also supported metals, making dollar-priced commodities cheaper for non-U.S. investors.

But copper lost grip of its intraday high of $6,948, as the dollar pared some of its early losses.

Upbeat U.S. data included Tuesday's home sales numbers, Monday's manufacturing figures and economic growth data on Friday.

Investors are scouring for signs of economic improvement after the economic crisis hammered Western demand for base metals, leaving China as a vital support for the market.

"It feels like a more positive environment than it did," said Stephen Briggs, analyst at RBS.

"The economic data that came out on Monday was a driving force allowing metals to stabilise and then recover," he added. "This week they'll continue to claw back a little bit of the losses of the last couple of weeks."

Global stock markets also rallied, as the data and strong U.S. corporate earnings bolstered risk appetite.

MONETARY POLICY

Base metals prices bounced also because investors' concerns about monetary tightening in China were starting to ease.

Copper was hit in late January by investors fears that signs of monetary tightening in China could hit demand from the world's top consumer of industrial metals.

"China's macro environment has changed from one predominantly focused on growth to one where balancing growth and inflation has become increasingly important to policymakers," Barclays Capital said in a note.

"Given China's importance to key commodity markets, these moves have had a noticeable impact on sentiment."

But many analysts said these fears had been overdone and that Chinese demand was still robust.

Stoking the positive sentiment, stocks of copper at LME warehouses fell for a second day in a row, breaking a trend of nearly constant rises since mid-July.

Stocks last fell 675 tonnes to 540,475 tonnes. At the end of last week copper inventories rose to about 543,500 tonnes to hit their highest level since last February.

Stocks of aluminium MAL3, used in transport and packaging, dropped 6,600 tonnes, but held near a record high above 4.6 million tonnes.

A large portion of those aluminium stocks are tied up in finance deals, to release cash for producers and to earn banks higher returns than they would get in money markets.

Aluminium traded at $2,118 in rings from $2,120.

Zinc MZN3 was at $2,175 from $2,160, while battery material lead MPB3 was quoted at $2,120/2,125 from $2,118.

Tin MSN3 was quoted at $16,550/16,575 from $16,450 and steel-making component nickel MNI3 was quoted at $18,195/18,200 from $18,300. Metal Prices at 1310 GMT Metal Last Change Pct Move End 2009 Ytd Pct

move COMEX Cu 308.50 0.00 +0.00 332.75 -7.29 LME Alum 2111.00 -9.00 -0.42 2230.00 -5.34 LME Cu 6835.00 15.00 +0.22 7375.00 -7.32 LME Lead 2116.00 -2.00 -0.09 2432.00 -12.99 LME Nickel 18150.00 -150.00 -0.82 18525.00 -2.02 LME Tin 16350.00 -100.00 -0.61 16950.00 -3.54 LME Zinc 2161.00 16.00 +0.75 2560.00 -15.59 SHFE Alu 16560.00 345.00 +2.13 17160.00 -3.50 SHFE Cu* 55820.00 1540.00 +2.84 59900.00 -6.81 SHFE Zin 17985.00 830.00 +4.84 21195.00 -15.15 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Sue Thomas)

METALS-Copper rallies on strong U.S. manufacturing data

* U.S. manufacturing sector grew in January - ISM

* China macro data unsettles industrial metals investors

By Carole Vaporean and Michael Taylor

NEW YORK/LONDON, Feb 1 (Reuters) - Copper rose on Monday, rebounding from an 11-week low after strong U.S. manufacturing data inspired optimism about the outlook for demand in the world's second-largest consumer of the metal.

Copper for three-month delivery MCU3 on the London Metal Exchange finished at $6,790 a tonne, up from $6,745 on Friday.

In New York, benchmark copper for March delivery HGH0 closed 3.10 cent higher at $3.0835 per lb on the New York Mercantile Exchange's COMEX division.

The range reached up to a high at $3.0995 a lb., pulling up from the lowest level hit since Nov. 13 at $2.9905 after a bout of early technical selling.

Boosting the economic outlook, the U.S. manufacturing sector grew in January at a faster rate than expected, with the index reading at its highest since August 2004.

"Sentiment has improved," said Eugen Weinberg, commodities analyst at Commerzbank. "The U.S. ISM data means manufacturing is picking up and implies the second largest client on the metals market will be asking for more industrial metals."

But Weinberg added that economic recovery will be slow -- a 'V'-shaped recovery with "a small 'v'."

"We had a really good ISM number this morning. That's a big part of it. We had a weaker dollar too following release of the budget numbers. So, a combination of those two factors," said Matthew Zeman, head of trading with LaSalle Futures Group in Chicago.

The metal used in power and construction fell as low as $6,600, its lowest since Nov. 16, as strong economic data from China stoked concerns that potential monetary tightening could dampen demand in the world's top metals consumer.

"China's definitely going to tighten the amount of bank lending across the economy, which will slow down growth," said Charles Kernot, an analyst at Evolution Securities.

"But they need to make sure that there is still some growth coming through," he added.

Zeman pointed out that, because Monday was the first day of the month, buying heated up as players were willing to take on more risk.

"A lot of this stuff was really beat up last month. So, we had a little more risk appetite in the market today. At the beginning of a new month we had some buyers come in and buying some of these issues on sale," said Zeman.

"Whether the buying is sustainable is another question. But, it helped today," he added.

Copper fell 8.5 percent in January, as rising inventories at LME inventories indicated demand outside China remained weak. Stocks last rose 2,475 tonnes to 543,525 -- their highest since late February 2009.

Copper rose 140 percent in 2009 on robust Chinese demand.

Aluminium MAL3 ended at $2,085 versus $2,080 on Friday. LME stocks of the metal used in transport and packaging fell 625 tonnes, but held near record levels over 4.6 million tonnes.

Nickel MNI3 was at $18,000 from $18,500.

Anglo-Swiss miner Xstrata Plc said it reached a tentative deal with union workers at its nickel mining operations in Sudbury, Canada, averting a strike.

Battery material lead MPB3 was last quoted at $2,045/2,047, up from $2,020. Lead earlier touched a low of $1,960, a level not seen since August.

Zinc MZN3 was at $2,145 a tonne, up from $2,110 and tin MSN3 fell to $16,150 from $17,200.

Analysts expect Chinese buying to remain subdued ahead of its lunar new year holiday in mid-February.

Copper Advances on Speculation Dropping Dollar Will Fuel Demand

By Chanyaporn Chanjaroen and Millie Munshi

Feb. 2 (Bloomberg) -- Copper prices rose for a second straight day on speculation that a decline in the dollar will spur demand for the metal as an alternative investment.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, slipped for a second day, falling as much as 0.3 percent. Copper in London dropped 8.5 percent in January, the biggest such decline in 13 months, as the dollar index rose 2.1 percent, its second straight gain. The metal more than doubled last year as the dollar slid 4.2 percent.

“It’s all about the dollar now,” said Andrey Kryuchenkov, a VTB Capital analyst in London.

Copper futures for March delivery advanced 0.7 cent, or 0.2 percent, to $3.0905 a pound at 11:38 a.m. on the New York Mercantile Exchange’s Comex unit. The metal gained 1 percent yesterday, halting a four-session slump of 10 percent.

Prices also rose after an industry report showed the number of contracts to buy previously occupied U.S. homes increased 1 percent in December from November. Builders are the biggest users of the metal in the U.S., according to the Copper Development Association.

“We got some encouraging housing numbers today, which is adding some support to copper,” said Michael Gross, an OptionSellers.com trader in Tampa, Florida. “The demand picture for this year is looking more optimistic.”

LME Price Gains

On the London Metal Exchange, copper for delivery in three months climbed $35, or 0.5 percent, to $6,825 a metric ton ($3.10 a pound). Aluminum, nickel, tin, lead and zinc rose.

Chinese purchases of LME-traded copper spurred by the price differential with the Shanghai market have come to a halt as the Asian nation prepares for this month’s weeklong Lunar New Year celebration, Leon Westgate, a Standard Bank Plc analyst in London, said yesterday in a report. The holidays start Feb. 14.

“There may be a bit of further weakness to come” in the near term, Westgate said, while maintaining his positive outlook on copper prices for this year and next.

Copper gained last year as imports climbed to a record in China, the world’s biggest metals user.

MEPS – WORLD STAINLESS STEEL PRICES SLIP IN JANUARY BUT UPTURN IMMINENT

2-1-2010

Source: MEPS

The stainless steel market appears to be at something of a crossroads, with raw material costs, end-user demand and the aims of the producers all having their separate influences. In the West, in particular, the post-recession pick-up in demand is eagerly awaited.

In Europe, the peak in the LME nickel values during late December and January has led to a significant hike in alloy surcharges for February. Furthermore, anticipated increases in the cost of other raw materials, such as iron ore and ferrochrome, should continue to push alloy surcharges higher. However, this upward trend has not brought about the increase in purchasing activity one might expect in these circumstances.

Some of the major European producers attempted to roll over or even raise basis figures in January but this met with limited success. With escalating surcharges in prospect, buyers are unlikely to accept yet more increments to transaction values. The restraining factor is end-user demand.

The situation in the US is similar. Surcharges have risen for February and are likely to do so again for March. Meanwhile, the basis price advances announced by the producers, to be applied in January, have not met with universal acceptance. Large projects are on hold, awaiting government funding or private investment, while consumer spending and confidence continue to exhibit recessionary features.

The economies of the Far East show different characteristics from those in the West. Observers in Japan are seeing signs of improvement after a long, difficult, time. There are reports of increased demand from automotive and domestic appliance manufacturers, though not from construction. These positive signals have not yet given rise to any increase in market stainless steel prices.

Demand in Korea, Taiwan and China has been much less influenced by the recession in the West. Stainless steel production has continued at levels much closer to full capacity than has been the case in Europe or North America.