Lme Copper Firmer, Zinc Steals Show

Copper prices took a look at the upside on the London Metal Exchange (LME) on Tuesday, but zinc's brisk short-covering rally stole the show at an otherwise sluggish midday session.

Copper drifted higher amid thin volumes on what traders said was a combination of shortcovering after the holiday weekend and technical buying.But it failed to advance from the $2,380 resistance area and prices eventually drifted back from highs by the end of the midday session.

Three months copper settled at $2,370 by the end of the session, which was still a $10 gain from Friday's kerb close.

Traders said continued range trading below stiff resistance at $2,400 was probably in store for copper.

 

Most of the attention during the rings was focussed on nearby spreads, with cash/May close to level and the tightness in the market rolled forward to the May date onwards. Cash/threes backwardation widened by about $10 to $70-72 at the end of the kerb.

The ongoing strike at Quebrada Blanca pit in Chile remains a supportive factor in the market. The market was also looking ahead to the May options declaration on Wedensday.

Zinc sparkled to the surprise of some traders by extending an early shortcovering rally. It made quick work of initial resistance at $1,280 and clambered up to a high of $1,290 in the rings, the highest level since April 3.

"It's really performed well today after a poor close on Friday. There was some shortcovering this morning and that continued in the rings.Once it got over $1,270 it kept on going," a trader said.

Aluminium was content to consolidate in a tight range after starting the day on a firmer note, underpinned by a 2,625-tonne drop in LME stocks. It settled $7 firmer at $1,631.