BASE METALS: LME Ring Ends For Holidays On Subdued Note

BASE METALS: LME Ring Ends For Holidays On Subdued Note
   By Andrea Hotter    Of DOW JONES NEWSWIRES  

LONDON (Dow Jones)--Predictably illiquid trading conditions characterized London Metal Exchange trade Wednesday, with the ring now closed for the holidays and traders expecting activity to remain subdued when it reopens Monday.

Holiday-thinned activity has failed to present any surprises, with players unwilling to close shorts given the broadly bearish outlook for prices in 2009.

Traders said the new trading year is likely to bring more production cuts, project deferrals, job cuts and weaker earnings, with a shakeout of players expected as the global economic downturn bites demand even harder.

LME copper ended the session down $20 a metric ton at a bid/ask of $2,845 to $2,850 per metric ton.

While consensus is that aggressive interest-rate cuts from Western central banks and a stimulus package by the Chinese government should help economies recover, the bear market in commodities isn't expected to vanish overnight. Estimates for how long the downturn will restrict prices range from six months to several years, but most analysts believe conditions will deteriorate further before any improvements are seen.

How economies react to the attempts to restimulate economic activity remains to be seen. Anecdotal evidence suggests China's government is buying aluminum metal from producers for a strategic stockpile and is set to meet companies to discuss options, including purchasing bauxite.

Little evidence has yet been seen of this buying in the market, however, with aluminum hard hit by rising inventories, a collapse in demand, and the emergence of a large amount of off-warrant metal into the market.

LME aluminum ended the day down $23 at a bid/ask of $1,537 to $1,540 per metric ton.

  Prices in dollar a metric ton. 3 Months Metal        Bid-Ask    Change from                                 Tuesday PM kerb Copper                2845-2850      Dn  20 Lead                   850-851       Dn  15 Zinc                  1150-1155      Dn   7 Aluminum              1537-1540      Dn  23 Nickel                9600-9625      Dn 150 Tin                   9850-9855      Dn  75 Aluminum Alloy        1100-1101      Dn  38 Aluminum Alloy-NASAAC 1060-1065      Dn  20   

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;

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December 24, 2008 11:01 ET (16:01 GMT)

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