Financial Times: Record tin prices spur on other base metals

EXTRACT: ICE June Brent fell 47 cents to $67.78 a barrel after reports on Monday that Royal Dutch Shell would resume production by the end of the month at its 380,000b/d Forcados oilfield in Nigeria, which has been closed since February 2006. Militants in the Niger Delta have disrupted oil production in Nigeria, the world’s eighth largest exporter. Violence erupted again at the weekend during state elections in the run-up to the presidential vote on April 21 amid allegations of voting rigging.

THE ARTICLE

By Chris Flood
Published: April 18 2007 03:00 | Last updated: April 18 2007 03:00

Tin prices hit a record yesterday while copper surged through the $8,000 a tonne level for the first time in eight months, encouraging a strong performance by other base metals.

Tin rose 2.6 per cent to $14,900 a tonne after hitting a record $15,000 in the session, amid continuing concern about supplies from Indonesia. Last year, the government in Indonesia shut down a large number of independent smelters operating on the tin-producing island of Bangka and it has approved only two export permits since then.

Copper raced 4.5 per cent higher to $8,080 a tonne amid concern that output could be disrupted at the giant Grasberg mine in Indonesia, which is operated by Freeport McMoran. Disgruntled workers were planning to hold a protest rally today, demanding fairer career opportunities and better pensions. Grasberg is estimated to contain the world’s third largest copper reserves and huge gold reserves and is expected to produce 499,000 tonnes of copper this year.

Nickel jumped 4.5 per cent to $48,300 a tonne as support for sentiment continued to come from low inventory levels with just 2,658 tonnes available to the market, less than one-day of global consumption.

Aluminium rose 2.5 per cent to $2,892.5 a tonne while zinc leapt 5.9 per cent higher to $3,707.5 a tonne, helped by a fall of 950 tonnes in London Metal Exchange stocks.

Oil prices were volatile yesterday after news of a leak in a Canadian pipeline that supplies the US. The leak, on Sunday night, disrupted supplies to the US mid-West. The pipeline has a capacity of 450,000 barrels a day and is operated by Enbridge, a Canadian company. It declined to say how long disruption would last but said the pipeline was still pumping oil from terminals south of the leak.

Nymex May West Texas Intermediate added 41 cents at $64.02 a barrel but futures prices from June onwards moved lower.

Nymex June WTI traded 33 cents lower at $65.34 a barrel, which suggests traders do not expect supply disruption to last long.

ICE June Brent fell47 cents to $67.78 a barrel after reports on Monday that Royal Dutch Shell would resume production by the end of the month at its 380,000b/d Forcados oilfield in Nigeria, which has been closed since February 2006.

Militants in the Niger Delta have disrupted oil production in Nigeria, the world’s eighth largest exporter.

Violence erupted again at the weekend during state elections in the run-up to the presidential vote on April 21 amid allegations of voting rigging.

Gold edged 0.3 per cent lower to $688.50 a troy ounce. Platinum fell 0.6 per cent to $1,264 a troy ounce.

Copyright The Financial Times Limited 2007

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