Several of the base metals, including copper and aluminum, fell in price on Friday. The main contributors to their decrease in price are believed to be concerns over European debt, and China’s focus on curbing inflation. See the following article from The Street for more on this.
Base metals drifted lower Friday on concerns the sovereign debt crisis contagion could spread across Europe. Moreover, Beijing’s measures to curb inflation are likely to push the metals complex lower.
Reports of the European sovereign debt crisis spreading to Spain are raising fears that the bailout fund set up in May isn’t large enough to rescue the country, Business Week reports.
Meanwhile, the Shanghai Futures Exchange said it will raise margins and daily price limits across commodities as part of China’s measures to curb inflation, BusinessWeek reports. Margins on copper, aluminum, steel wire, gold, and fuel oil will rise to 10%, while for steel-reinforcing bars and zinc it may go up to 12%, and for rubber it may hit 13%, after the markets close on Monday. Daily price move limits for all commodities will widen to 6%, beginning Tuesday.
Copper
Copper for three-month delivery dipped 1.4% to $8,220 per metric tonne on the London Metal Exchange on fears of the Ireland debt crisis spreading to other European nations. Inventories narrowed 1,500 tonnes to 356,550 tonnes 358,050 tonnes.
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Aluminum
Aluminum for three-month delivery edged 0.5% lower to $2,270 per tonne. Inventories stood at 4.29 million tonnes.
Beijing is planning to ease power limits, earlier imposed for energy saving targets, for aluminum producers which could restart plants as early as December, Bloomberg reports, citing CRU International. As production resumes, it will help curb inflation and cool down commodities prices, which is China’s primary objective.
Nickel
Nickel for three-month delivery nudged 2% lower to close at $22,376 per tonne. Inventories declined 300 tonnes to close at 130,518 tonnes.
Posco(PKX_), the world’s second-largest maker of stainless steel, is striving to reduce the use of nickel due to volatility in the metal’s prices, Bloomberg reports. The company will now focus on the 400-series stainless products, which use ferrochrome as a raw material and are employed in the production of home appliances, automobiles, and other products that use less nickel. Additionally, the 300-series products, which use nickel as the raw material and are chiefly used in buildings, may decline to almost 57% of the global stainless market in 2010, down from 70% recorded earlier.
Zinc for three-month delivery rose 3.5% to $2,118 per tonne. Inventories declined to 632,325 tonnes from the previous close of 633,200 tonnes.
Lead
Lead for three-month delivery fell 1.3% to $2,300 per tonne. Inventories were down 275 tonnes to 203,350 tonnes.
This article has been republished from The Street. You can also view this article at The Street, a site covering financial news, commentary, analysis, ratings, and business and investment content.
