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DJ BASE METALS: Lower On Profit Taking, Fund Rollovers


Wednesday, April 11, 2007 5:17:52 PM
http://www.osterdowjones.com/



DJ BASE METALS: Lower On Profit Taking, Fund Rollovers

By Melanie Burton

Of DOW JONES NEWSWIRES



LONDON (Dow Jones)--Fund rollovers and profit-taking pressured the base
metals complex lower Wednesday as the markets paused for breath before the next
leg up.

LME copper, the star of recent days, gave back 2.5% of an early rally which
saw the metal post a fresh 10-month high of $7,950 a metric ton. "Copper is
higher on a combination on short covering and fresh (speculative) buying," said
Barclays analyst Sudakshina Unnikrishnan. "Even if it does come down further,
that doesn't mean that the uptrend will be broken. Prices will find a firmer
footing and move higher again."

Investors flush with second-quarter cash are fueling bullish momentum,
analysts said, capitalizing on the start of the seasonally strong second
quarter and strong Chinese demand, evident in recent record March import
figures.

As of 1648 GMT, copper traded at $7,830/ton, up 1.4% on the day, and still in
sight of the key psychological level of $8,000/ton.

Fund rollovers were also pressuring the base metals complex, said a broker,
as a predominantly long market sold the front end contract.

"At the moment funds are doing their rolls in the May-June positions," said a
broker.

Profit taking in the copper market spilled over into the nickel, lead, zinc
and aluminum contracts.

"Since lead and nickel were the markets that have gone up the most (this
year), where we've seen the biggest price movements (Wednesday's correction) is
not anything that significant," Barclays' Unnikrishnan said.

As of GMT 1750, three-month lead was 2.4% lower than Tuesday's kerb, at
$1,970/ton.

Whether LME nickel prices will set another high remains to be seen, she
added. "The key indicator will be a slackening off in the stainless sector,"
she said, "which doesn't appear to be happening."

As of 1450 GMT, nickel was down 3% at 46,900/ton.


Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 7829.0-7830.0 Up 109
Lead 1970.0-1975.0 Dn 50
Zinc 3520.0-3525.0 Dn 30
Aluminum 2871.0-2873.0 Dn 2
Nickel 46875.0-46900.0 Dn 275
Tin 14125.0-14150.0 Unch
Aluminum Alloy 2220.0-2230.0 Dn 60
Aluminum Alloy 2245.0-2250.0 Dn 30
(-NASAAC)


-By Melanie Burton, Dow Jones Newswires; [phone];
[e-mail]



(END) Dow Jones Newswires

04-11-07 1317ET

Copyright (c) 2007 Dow Jones & Company, Inc.