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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 March 22, 2001, the company reports on the activity in the market since its last report on Feb. 26. To see all previous reports from Allied-Hunter, click on Nickel & Metal Reports.

Copper — Bearish sentiment picked up steam since our last report on 2/26/01. All of the LME metals (with the exception of nickel, for the time being at least) have taken a similar beating as the equities markets. Comex was $.805/Ib on 2/26 and for the first full week of March showed some bounce, with prices reaching approximately $.84/lb. This was a short-lived phenomenon though, as the market has shown fairly steady erosion since then to $.78/Ib this morning. The growing weakness of the global economy underlies the current slide. With respect to trading on the LME, $1,690/MT is seen as the support level with current trading dangerously close to breaking through. Fundamentally speaking, LME warehouse levels increased significantly from 332,250 MT last month to 387,375 today. The market is waiting for news from Phelps Dodge on a possible production cutback from mines in Arizona and/or New Mexico. An announcement could be made as early as March 25. However, the extent of the current bearish market and the fact that a cutback of 150,000 MT per year is already expected will probably dampen the effect any news will have. It is likely that only a radical departure from the expected course of action will affect the markets.

Regardless of the news coming from Phelps Dodge, the current bias in the market continues to be on the downside. This is not the case for later in the year, as analysts see the market building strength in anticipation of improved economic conditions in the first quarter of 2002. In addition, the recent interest rate reduction and possible future reductions will have had a number of months to have their effect felt as will have the possible Phelps Dodge production cutback.

Tin — The tin market slipped a bit in March and now stands at $2.29/lb.

Zinc — Like copper and aluminum, the zinc market has fallen substantially in the last two weeks, close to breaching the $1,000/MT level (3-month basis). The market currently stands at approximately $.45/Ib with little likelihood of an upward breakout any time soon.

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

Source: Allied-Hunter