Copper, aluminium steady, but seen vulnerable
[2008-12-23 17:07:13]
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Copper steadied on Wednesday, after rising more than 2 percent earlier in the session, supported by a weaker dollar and as sentiment improved slightly on hopes of a deal on a bailout plan for U.S. automakers.
But the market looked fragile, as weak consumption outlook for metals in a gloomy economy persisted and fresh bad news that global miner Rio Tinto
Copper for three-month delivery on the London Metal Exchange (LME) rose to a session high of $3,290.25 a tonne and was at $3,215 a tonne in open outcry trade from $3,200 a tonne on Tuesday, when it tumbled 6.5 percent.
"Copper's moving closely in line with what is going on in the dollar," said analyst Leon Westgate at Standard Bank, adding that news of U.S. lawmakers nearing an agreement on a plan to rescue stricken automakers also injected some optimism.
The dollar and the yen fell while the euro hit a two-week high against the U.S. currency.
But traders and analysts saw little room for a sustainable rally, saying the weaker outlook for metals consumption in the next few months had not changed.
"Copper's fundamentals have not changed," said a trader on the floor of the LME. "There's not much demand, so we're looking at further weakness ahead," he said.
More bad news confirmed his comments. Industrial output sank in several European economies in October, hit hard by the slowing economy and falling sales.
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