Base Metals

The base metals were all on a roll on Monday. Copper started up in the pre-dawn hours and never quit, pushing higher straight through the day and finishing at its intraday high of $1.7295/lb., up nearly 8½ cents. Nickel followed the same path, but had a few setbacks that left it just off its intraday high at $4.5299/lb., up 27¼ cents. Zinc also blasted to its intraday high of $0.5578/lb., up 2¼ cents. Aluminum had a modestly higher day, adding just under than a penny, to $0.6041/lb., while lead showed good strength, tacking on better than two cents, to $0.5876/lb.

Copper soared, leading all the base metals through a major up day, as China reported a record jump in imports.

Imports of copper and alloys surged 55%, to 283,461 metric tons, from January to February, the Beijing-based customs office said. That’s the highest level since at least 2004. Combining January and February, imports are up 53.5%, year over year.

“We’re looking at places in the world like China that are going to be the leader going forward,” said Paul Baiocchi, senior market strategist at Delta Global Advisors in Huntington Beach, California. “These are the types of imports that will drive commodities.”

Adding to the day’s optimism were stockpile numbers. Inventories monitored by the LME fell by 2,775 metric tons yesterday, to 494,850 tons. That marks a drop of more than 50,000 tons since late February.

Copper is suddenly back in favor, no doubt about it. Among 19 raw materials in the Reuters/Jefferies CRB Index, copper has outgained every commodity except gasoline in 2009. Shares of Freeport-McMoRan Copper & Gold, the world’s largest publicly trader copper producer, have jumped 56% so far this year, making them the third-biggest gainer in the S&P 500. And the benchmark May contract is up 13% since the beginning of March.

Additionally, “A lot of today’s move for copper has to do with Bernanke,” said Donald Selkin, of National Securities Corp. in New York, who noted the Fed chair’s reassuring words. “It looks like there’s a little bit of light at the end of the tunnel.”

In company news, Rio Tinto’s largest Australian shareholder said the company’s proposed deal with China’s Chinalco should be revised. Ross Barker, managing director of Australian Foundation Investment Co., said the $19.5B deal gives Chinalco “significant influence” over the company, and that Rio should “consider the views of their shareholders to see whether they can come up with something that’s more acceptable.”