February Metals Review: Copper, Tin, and Zinc

Note: Allied-Hunter Corporation has issued its latest review of the current state of the copper, tin, and zinc markets. These reports are provided monthly. In this review dated Feb. 26, 2001, the company reports on the activity in the market since its last report on Jan. 25. To see all previous reports from Allied-Hunter, click on Nickel & Metal Reports.

Copper — Through the first three weeks of February, the copper market was quite stable; trading on Comex was within a narrow range of $.82–$.83/Ib for the most part. However, last Thursday saw a quick decrease to below $.80/lb. Regarding trading on the LME, the price broke through the psychologically significant level of $1,750/MT to reach lows not seen since last April. Pressure was applied to the market due to the poor performance of the equities markets and indications that slower growth has taken hold of the U.S. economy. Continued declines in LME warehouse levels to 332,250 MT haven't been enough to reverse bearish sentiment.

Trading was also weak on Friday, but the situation may have stabilized today as the market rallied a bit, with prices for the active month of March on Comex up almost $.01/lb from this morning to $.8045/Ib as of this writing. The question remains whether today's activity represents at least a stop in the decline or is this just a pause on the road to $.75/lb. Over the longer term, two analysts announced at a copper association meeting their prediction of average of $.88/Ib in 2001. The central bank of Chile, the world's largest copper-producing nation, revised its prediction for 2001 from an average yearly price of $.87/Ib to $.86/lb.

Tin — The tin market slipped a bit in February and now stands at $2.31/lb.

Zinc — The zinc market didn't do well in February, reaching a 20-month low on Thursday. Prices slid from $.47/Ib at the time of our last report on Jan. 25 to $.46/Ib today. However, the loss was stemmed late last week and today as the support level of $1,015/MT (3-month) held firm. Reports of increased Chinese smelting capacity, rising production in Europe and Australia, and reduced demand by the steel galvanizing industry have added a bearish tone to the zinc market's fundamental supply/demand picture.

Allied-Hunter Corporation, 428 Pennsylvania Ave., Suite 1, Ft. Washington, PA 19034-3406 USA. Tel: 800-887-6633 or 215-646-4700. Fax: 215-628-4040.

Source: Allied-Hunter Corporation