Currency factors were a far lesser influence during trading on the London Metal Exchange last week than they had been in the one before.
As a result the prices of copper, zinc and lead all moved into the plus column while the losses recorded by the other metals were all extremely minor. The overall picture would have been far better had it not been for a particularly poor finish on Friday for all the metals due to fund profit-taking, causing nervous liquidation of long positions by locals.
There were no major features among the warehouse stock movements although the 8,325 tonne drawdown of zinc did continue the on-going downward path where the total is, at last, approaching the 500,000 tonne level.
Copper's closing price increased slightly each day through to Friday when, following a high of $3,300 per tonne, the forward price succumbed to the profit taking with a kerb close of $3,230, $34 above that of the previous week.
The low for the week had been on Wednesday at $3,215, the high $3,308 on Thursday. Stock movements were mixed leading to a 150 tonne increase. The backwardation did widen at one time to $165 per tonne, but by the close it was back at $152.
Following the pattern set by copper, this metal had climbed $50 to a $1,986 high by Thursday and was still at $1,975 on Friday before being hit by the same fund profit taking which took the forward price down to a $1,927 close for a net loss over the week of just $2 per tonne.
Exchange stocks fell by 6,750 tonnes with the backwardation remaining out at $10 per tonne; stocks at Western World smelters have also declined over recent months. Clearly the $2,000 level is proving a difficult obstacle to overcome.
Initially under pressure, this contract hit a low of $1,327 on Wednesday before benefiting from the influence of the leaders by recovering to $1,360 the same day.
The high for the week was $1,377 on Thursday and although starting at $1,375 on Friday, zinc then fell with the rest of the metals to a $1,346 closing low for an overall loss of $11.
Although falling almost weekly, the stock level appears to be still insuring the continuation of a $23 contango and this in turn is deterring further speculative buying which always benefits from the existence of a backwardation.
Having consolidated at the current level, prices should eventually regain recent higher levels.
Performing uncharacteristically well throughout the rest of the week leads closing price improved daily, it was at $988 on Thursday with a week's high of $996, following on Friday before profit taking brought about a sharp reversal to a $957 close so that the overall gain on the week was only three per tonne.
With the persistent backwardation encouraging longs to maintain their positions all looks pretty well assured unless they decide that they have waited long enough and decide to move on. Figures for 2004, show global mine production was down by 0.5 per cent while demand growth was at $3.4 percent, up from 1.9 percent the previous year.
Despite falling from $15,700 last Tuesday to a week's low of $15,250 on Wednesday, nickel showed remarkable resilience as it recovered to close at $15,650 the same day.
Thursday's high of $15,950 proved to be the top of the market, but the decline on Friday was only to a close at $15,625 for a week's loss of $120 per tonne.
Exchange stocks fell by 666 tonnes while the backwardation closed at $380 having reached $450 on Thursday. Once again fundamentals of insufficient supply to meet growing demand are being quoted to underpin prices for this year.
Another metal to dip to a week's low on Wednesday, in this case at $7,830, tin then recovered to $8,100 on Thursday before closing on Friday at $8,025 following a $8,200 high earlier in the day.
The loses for the week $150 per tonne. Stocks rose by 160 tonnes while the backwardation widened to $70.