Metals Mixed; Copper Hits 31-Month High

NEW YORK （Karvy） -- Base metals were mixed early Thursday on a weaker dollar index, but could gain ground if economic data scheduled for later in the day is positive.

Initial weekly jobless claims in the U.S. for the week ended Dec. 4 are seen declining to 425,000, compared to 436,000 recorded in the prior week. Wholesale inventories for October are seen rising by 0.9%.

Copper

Copper for three-month delivery rose 0.6% to $9,066 per metric tonne on the London Metal Exchange, hitting 31-month highs on concerns that the Federal Reserve will extend asset purchases to support the economy. A pullback in the dollar boosted the appeal of commodities as an alternative investment. Copper inventories narrowed by 1,125 tonnes to close at 350,250 tonnes, down to 52-week lows. The metal faces support at $8,791 and resistance at $9,098.

As per a median forecast of 12 analysts surveyed by Bloomberg, demand for the red metal will outstrip supply by 367,500 tonnes in 2011, indicating the first shortage since 2007. The International Copper Study Group says the market is likely to face a deficit of 435,000 tonnes in 2011.

To day, LME stockpiles have declined by almost 30% and may drop to an all-time low of less than one week's supply, according to Bank of America Merrill Lynch.

Southern Copper（SCCO） closed at $45.73 Wednesday, finding support at $44.98 and resistance at $46.62. Freeport-McMoRan Copper & Gold（FCX） closed at $108.60, with support and resistance at $106.35 and $111.20, respectively. Teck Resources （TCK） closed at $55.00, with support at $54.21 and resistance at $56.15.

Aluminum

Aluminum for three-month delivery dipped 0.3% to $2,365 per tonne. Workers at BHP Billiton's（BHP） aluminum smelters may go on a strike demanding better wages, buoying aluminum prices. Inventories slumped 5,800 tonnes to close at 4.28 million tones. The metal faces support and resistance at $2,289 and $2,410, respectively.

Credit Suisse（CS） is planning to list a physically backed exchange-traded product in London, Businessweek reports, citing a source familiar with the matter. The proposed fund will use the metal available in LME-monitored warehouses.

Alcoa（AA） closed at $14.14 Wednesday, finding support and resistance at $13.99 and $14.32, respectively. Century Aluminum（CENX） closed at $14.87, with support at $14.66 and resistance at $15.16. Kaiser Aluminum（KALU） closed at $50.41, finding support at $50.04 and resistance at $51.01.