Farallon Resources Ltd. (fka FRLIF)

[the cork]

Zinc gains, Copper Advances, On Course for Weekly Gain, as Stockpiles Keep Declining
By Anna Stablum - Jul 9, 2010

Copper rose in New York and London, on course for a weekly advance, as inventories dropped further, signaling steady demand.

Copper stockpiles tracked by the London Metal Exchange shrank for a 16th day and slid for a 20th week in a row. In Shanghai, inventories contracted for a ninth week in 10. Prices also increased as the MSCI World Index of equities advanced for a fourth day.

“Base metals have benefited from improved risk sentiment over the past week, gradually trending higher, also helped by persistent stock draws,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e-mail today.

Futures for September delivery gained 1.75 cents, or 0.6 percent, to $3.033 a pound at 8:15 a.m. on the Comex in New York. The most-active contract is up 4 percent this week. Copper for delivery in three months rose 1.2 percent to $6,695 a metric ton on the LME.

Stockpiles tracked by the LME declined to 436,900 tons, the lowest level since Nov. 27. They’re down 13 percent this year, headed for the first annual drop since 2004. Bookings to remove metal from LME warehouses fell for a second day, sliding 8.9 percent to 29,550 tons.

Stockpiles in Shanghai

Inventories monitored by the Shanghai Futures Exchange dropped to 117,459 tons this week, the exchange said on its website today.

“Shanghai stocks are still falling, which is a very positive sign,” VTB Capital’s Kryuchenkov said.

Copper futures outstanding, or market open interest, rose to the highest level since March 5, 2009, LME data showed. Open interest was up 14 percent from this year’s low to 441,402 contracts as of July 7. Aluminum open interest rose to the highest since August last year, the figures showed.

Nickel for three-month delivery on the LME dropped 0.8 percent to $19,238 a ton. Vale SA workers at two Ontario plants voted to end their year-long strike, the United Steelworkers union said, closing the longest industrial dispute in the company’s 67-year history.

Aluminum rose 0.2 percent to $1,992.50 a ton. Immediate- delivery metal’s discount to the three-month price, the so- called contango, narrowed to $20 a ton yesterday, the lowest level since July 24, 2009, from $22.75 in the prior session.

“Financing deals have restricted spot availability,” Gayle Berry, an analyst at Barclays Capital in London, said in a report. “This tightening of the nearby spreads also reflects what we believe is an improvement in fundamentals, with demand continuing to recover.”

LME-monitored aluminum inventories have shrunk 5 percent so far this year to 4.40 million tons. A drop for all of 2010 would be the first annual decline since 2005.

Lead added 0.1 percent to $1,829.25 a ton, zinc gained 0.3 percent to $1,861 a ton and tin climbed 0.6 percent to $17,660 a ton.

http://www.bloomberg.com/news/2010-07-09/copper-advances-in-london-on-weaker-dollar-further-decline-in-inventories.html