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Comex copper ends up, trails soaring aluminum

NEW YORK: Comex copper futures eked out a gain on Tuesday, shaking off early softness and retesting last week's peaks as booming London metals scrambled to new multi-month records, dealers said.

The benchmark Comex contract matched last Wednesday's contract high, taking direction, if not magnitude, from the London Metal Exchange, where copper in late trade touched a 21-month high of $1,905 a tonne and aluminum scaled to a 29-month peak of $1,724.

In New York, where markets were closed Monday for Martin Luther King, Jr., Day, active March settled up 0.35 cent at 86.60 cents a lb after moving from a low of 85.10 to a high of 86.95 cents. Spot February finished up the same at 86.15 cents.

"Copper was mostly fund buying and the strength in aluminum," said a futures broker. "Aluminum is really starting to run away but all the metals seemed to find fund buying this morning."

Nickel and zinc also advanced in vibrant London dealings. Since the start of the year aluminium prices have risen over four percent. The market is up 47 percent from the 5-1/4 year lows of $1,158.50 in March 1999.

Refined metal supplies are likely to be restricted in 2000 because of a shortage of alumina -- the raw material used in producing primary aluminium metal.

Alumina prices are around the highest for over a decade after last year's explosion at the massive Gramercy smelter owened by Kaiser Aluminum Corp and delayed shipments from Australia in December.

LME copper closed equal to last Wednesday's 21-month high of $1,904. It now needs to overcome resistance at $1,910 of its own volition.

Analysts continue to peg resistance in Comex copper between 87 and 90 cents, with producers heavy offerers at the top.

"The technicals still look good but you really didn't see much follow through after we took out the 1998 high, said David Rinehimer, director of commodities research at Salomon Smith Barney.

"Assuming you are only going see a relatively modest supply deficit situation -- you are really going to be more in balance than a huge deficit, unless demand is a lot stronger -- the market is going to struggle," he said.

Final Comex copper turnover on Tuesday was estimated at 11,000 contracts versus Friday's holiday-lightened tally of 5,010 contracts.

The nine-day relative strength index for March copper ended Tuesday at 65, up from Friday's 61. Technical analysts usually interpret an RSI reading of 70 or higher as indicating overbought conditions and 30 or below as oversold.-Reuters