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Metal prices lower on LME

LONDON: Base metal prices fell across the board on the London Metal Exchange (LME) Friday in what traders said was an orderly correction to the week's dramatic gains.

Traders remain bullish for most markets, particularly copper which is likely to remain genuinely tight until well into 1996.

Investment funds held off after active buying throughout the week, while other participants looked to take profits. Volumes were low compared with the last few days, traders said.

"The funds stepped back today. The markets had to come off a little after the week's rally, and copper is still looking very good," one trader said.

The red metal finished the afternoon kerb at $3,040 a tonne, down $17 from Thursday's close.

Cash maintained a strong premium over forward months, reflecting ongoing physical tightness and low stocks. LME stocks in fact rose Friday after more deliveries into U.S. warehouses, but the build did not dent prices significantly.

Traders are confident three month futures will break the 1995 high of $3,081 soon.

Aluminium fell $21.5 to $1,935 as the market sought to consolidate gains. Prices are still in recent ranges, but some traders argue a bullish base is being formed.

"Aluminium is building a lovely base. I think resistance at $1,973/75 will be taken out soon," the trader said.

LME stocks fell 1,600 tonnes, a much smaller reduction than in recent months. Stockdraws were expected to decelerate as the physical market entered its seasonal lull during August.

Nickel finished close to its recent six-month peak of $9,325. The metal ended $25 lower at $9,285, underpinned by another sizeable decline in stocks of 834 tonnes.

Traders said metal continued to move out of LME warehouses even during the peak shipping season from Russia.

Tin ended $50 lower at $7,220. Stocks rose 385 tonnes.

While cash premiums still attracted metal into warehouses, good-quality tin is said to be in short supply. Prices are not far below this week's near six-year high of $7,310.

Lead slid $10 to $639 despite stocks falling 775 tonnes.

Zinc fell $5 after stocks rose 3,650 tonnes.

Alloy was last quoted at $1,735/45 against $1,750/60. Stocks rose again by 1,260 tonnes.-Reuter