Copper prices in London on Wednesday climbed along with other LME base metals, supported by the weakening dollar and optimism about the prospects of the U.S. property market.

Three-month copper on the London Metal Exchange rose 1 percent to $9,437 a tonne by 0727 GMT. Copper rose 1.3 percent in the previous session, snapping a six-session run of losses.

"Perhaps the market took some solace in the U.S. housing numbers and reacted positively to it. However, it could be that it is rebounding from the day before when it got a bit carried away with S&P's threat of a U.S. sovereign credit downgrade," OSK-DMG's Chief Group Economist Thomas Lam said.

U.S. housing starts rose 7.2 percent in March to a seasonally adjusted annual rate of 549,000 units, and permits for future home construction also picked up. A typical U.S. home consumes around a fifth of a tonne of copper. [ID:nCAT005413]

Following Tuesday's strong numbers, there was a sense in the market that Wednesday's data could beat forecasts for a 2.5 percent rise in existing home sales for March.

Upcoming holidays -- with London closed for four out of the next eight trading days -- could also lead to brisk trade.

"The Easter weekend is coming up, so traders may be doubling up to clear up positions, causing base metal prices to rise in the meantime," Macquarie Bank Research Analyst Bonnie Liu said.

Copper was also supported by a weaker dollar, which dipped 0.4 percent against a basket of currencies , falling back towards a 16-month trough of 74.617 set last week.

Financial markets stumbled on Monday, sending copper to its lowest in around a month, after ratings agency S&P warned that it may downgrade the United States' AAA debt rating unless it can bring its budget deficit under control.

Shanghai's most-active copper futures contract SCFcv1 rose 1.9 percent to 71,060 yuan a tonne.

Technically, Shanghai copper could rebound into a range of 71,120 to 71,660 yuan per tonne, while LME copper could rise further to $9,488 per tonne, according to Reuters technical analyst Wang Tao.

"LME copper prices have been moving within a range of $9,000 and $10,000, only breaching that upper limit once in February before falling back quickly," Great Wall Futures Analyst Li Rong said, adding that the market may be due for an upward correction in the fourth quarter.

LME copper stocks rose 175 tonnes on Tuesday, to 451,950 tonnes, their highest since June, equivalent to a little over eight days of global supply.

In industry news, BHP Billiton reported a 19 percent jump in copper output for the March quarter, up from a year earlier when production had been disrupted by a mine accident. [ID:nL3E7FJ411]

ALUMINIUM, NICKEL RISE

LME aluminium rose 0.9 percent to $2,738, extending Tuesday's 1.5 percent rally. It touched a top of $2,741 earlier in the session, its highest since August 2008.

According to technical charts, a bullish target has been established for aluminium at $2,779 in the near term.

Earlier in the day, China ordered central and provincial authorities to stop approving the construction of new aluminium smelting capacity. [ID:nL3E7FK0JH]

China had an annual capacity of around 20 million tonnes in 2010, around 40 percent of the world's 50 million tonnes, Reuters Metal Production Database shows.

The market expects Chinese aluminium output to exceed consumption by 1 million tonnes. A concerted, effective crackdown would cut that, and if maintained, could turn the country into a net importer, with the potential to lift global prices.

Previous efforts by Beijing to rein in the sector had started to bite during late 2007 and 2008, but were relaxed during the financial crisis and in some cases replaced by incentives to expand output as China strove to maintain employment and growth.

The latest circular on the subject, however, read slightly tougher than usual, citing that individuals could be asked to take legal responsibility if state policy was not followed.

LME nickel prices rose 1.7 percent to $25,725.

"The rise in nickel prices seems to have more to do with strong physical demand than the short-term effects of the weaker dollar and better outlook for the U.S. property market. The utilisation rate in China is pretty solid, but production has also started to increase, so I don't expect prices to rally too much," said Macquarie's Liu.

Base metals prices at 0727 GMT
  Metal              Last       Change   Pct Move YTD pct chg
  LME Cu            9437.00     97.00     +1.04     -1.70
  SHFE CU FUT JUN1    71060      1340     +1.92     -1.10
  LME Alum          2738.00     24.00     +0.88     10.85
  SHFE AL FUT JUN1    16770       145     +0.87     -0.42
  HG COPPER MAY1     427.85      4.10     +1.16     -3.63
  LME Zinc          2352.00     23.00     +0.99     -4.16
  SHFE ZN FUT JUN1    17825       265     +1.51     -8.47
  LME Nickel       25725.00    425.00     +1.68      3.94
  LME Lead          2589.75     32.75     +1.28      1.56
  SHFE PB FUT SEP1    18165       185     +1.03     -1.01
  LME Tin          32734.00    334.00     +1.03     21.69
  LME/Shanghai arb    1148

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Barclays Capital declined to comment on Friday on market talk it was the holder of a dominant position controlling 80-90 percent of lead stock warrants and cash contracts on the London Metal Exchange (LME).

Data on Tuesday and Wednesday had shown a dominant position at more than 90 percent, while data on both Thursday and Friday showed it lower at 80-90 percent.

Two market sources, who declined to be named, said Barclays Capital held the dominant position.

"Talk around the market is it's Barclays," a trader said. "Probably not for themselves, (it) could be for a client."

A spokeswoman for Barclays Capital, the investment banking arm of British bank Barclays (BARC.L), declined to comment on whether it was holding the dominant position.

The backwardation on lead -- a premium for cash material over the three-month contract MPB0-3 -- rocketed to $80 a tonne, its highest since October 2007. This compared with a backwardation of $31 earlier this week.

There was a contango on lead of $0.5 in late December -- a discount for cash over three-month material.

LME lead for three-month delivery traded at $2,456.50 a tonne at 1336 GMT versus a close of $2,437 a tonne on Thursday.

"...with the market displaying a dominant position holder in the stocks the nearby backwardation continues to widen at odds with the rest of the market and is clouding the picture still further," RBC Capital Markets said in a report.

Cash for next-day delivery changed hands at $12.65, the highest in more than two years, signalling a lack of available supply for the metal.

STOCKS WATCHED

However, data this week showed a climb in lead stocks at LME warehouses, as market sources said the backwardation was drawing metal into warehouses. Lead stocks last fell 175 tonnes to 264,175 tonnes, having earlier this week touched their highest level since May 1995.

Data on Friday showed a dominant position holding 50-80 percent of LME lead stock warrants, while data from the previous two sessions showed no dominant positions here.

The LME has the power to step in and force dominant position holders to make metal available to other market players by imposing its lending guidelines, which are aimed at ensuring orderly markets.

Under these guidelines, if an LME member or client holds 50 percent or more of the warrants or cash positions, it should be prepared to lend at a premium that is no more than half a percent of the cash price for a day.

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Silvercorp Metals Inc. (TSX: SVM)(NYSE: SVM)("Silvercorp" or the "Company") is pleased to report that its GC silver-lead-zinc project in the Guangdong Province has received a mining permit issued by the Ministry of Land and Resources of China. The GC mining permit has a term of 30 years and covers the entire 5.52 square kilometer area of the GC Project. The permit was issued on the terms applied for, and allows for the operation of an underground mine to produce silver, lead and zinc ores.

A qualified Chinese engineering firm is close to finalizing the design of a 1,500 tonne per day mechanized underground mine, a flotation mill, and a dry stack tailing facility. The estimated capital cost is about US$30 million. Following its completion, Silvercorp expects to convert the design report into a NI 43-101 qualified report. With the strong support of the local County government, Silvercorp has completed the acquisition of surface rights required for the construction of the mine and mill and is preparing the site and hiring contractors for the construction. Initial production of 700 tonnes per day mining capacity is expected to be achieved in 12 months with full capacity of 1,500 tonnes per day to be achieved in 18 months. The GC Project is held though a 95% owned Chinese subsidiary.

Receiving the GC Mining Permit represents an important step in Silvercorp's China expansion strategy beyond the Ying Mining camp in Henan Province:

-- creating production footholds in new areas,

-- establishing Silvercorp's reputation for production expertise and
efficiency in the new camp; and

-- build through production increases and potential consolidation of other
nearby mining assets.


Silvercorp intends to rapidly establish the GC Project in Guangdong Province as its second production base and foothold, to be followed by a third production foothold at the recently acquired BYP Gold-lead-Zinc Project in Hunan Province.

About Silvercorp Metals Inc.

Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation of the four silver-lead-zinc mines at the Ying Mining Camp in the Henan Province of China. The Company has applied for a mining permit for its GC silver-lead-zinc mine in the Guangdong Province and recently announced the acquisition of a 70% interest in the BYP gold-lead-zinc mine in Hunan province. In Canada, Silvercorp is in preparation of applying for a Small Mine Permit for the Silvertip high grade silver-lead-zinc mine project in northern British Columbia to provide a further platform for growth and geographic diversification. The Company's shares are traded on the New York Stock Exchange and Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.

CAUTIONARY DISCLAIMER -- FORWARD LOOKING STATEMENTS

Certain of the statements and information in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; the sufficiency of the Company's capital to finance the Company's operations; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining Camp; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; First Nations title claims and rights; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company's existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.

This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form for the year ended March 31, 2010 under the heading "Risk Factors". Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

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Base metals were trading mixed early Friday as China's export-import data came in better than expected.

The metals complex could firm during the day taking cues from China's imports, the launch of new commodities exchange-traded funds, and the Michigan consumer confidence survey.

ETF Securities launched physically backed copper, nickel, and tin exchange-traded products on the London Stock Exchange on Friday, and plans to roll out other funds backed by aluminum, zinc, and lead in 2011. Launch of ETPs will likely boost investment demand for base metals.

Among the U.S. economic data scheduled for release Friday, the Michigan survey is expected to come in modestly higher at 72.5, up from a prior reading of 71.6.

Copper

Copper for three-month delivery rose 0.7% to $9,015 per metric tonne on the London Metal Exchange. China's trade data showed a rise in copper and copper products imports in November to 351,597 tonnes from 273,511 tonnes in October, up 29%.

Copper inventories narrowed 800 tonnes to close at 349,450 tonnes, slumping to new 52-week lows. The metal faces support at $8,849 and resistance at $9,041.

Copper prices could rise 22% over the next 24 months as supply dwindles amid increasing demand from China and North America, according to U.S. Global Investors, Bloomberg reports.

Southern Copper(SCCO_) closed at $45.72 Thursday, finding support at $45.20 and resistance at $46.39. Freeport-McMoRan (FCX_) closed at $110.66, with support and resistance at $109.53 and $111.89, respectively. Teck Resources (TCK_) closed at $55.11, with support at $54.59 and resistance at $55.82.

Aluminum

Aluminum for three-month delivery was unchanged at $2,338 per tone. Inventories declined 3,125 tonnes to close at 4.278 million tonnes. The metal faces support and resistance at $2,295 and $2,380, respectively.

Vedanta Resources, a wanna-be mini-BHP(BHP_) , has sought approval from the government of India for restarting an $8.5 billion alumina expansion project, halted two months ago for violating forestry regulations.

Alcoa(AA_) closed at $14.15 Thursday, finding support and resistance at $14.03 and $14.36, respectively. Century Aluminum(CENX_) closed at $15.32, with support at $15.05 and resistance at $15.47. Kaiser Aluminum(KALU_) closed at $51.69, finding support at $50.35 and resistance at $51.69.

Nickel for three-month delivery gained 0.6% to close at $23,750 per tonne. Inventories declined 396 tonnes to 131,196 tonnes. Nickel has support at $23,268 and resistance at $24,118.

European Nickel suspended work at the Caldag Mine in Turkey, awaiting a forestry permit. Caldag is one of the two important projects with a production target of 20,400 tonnes of nickel and 1,200 tonnes of cobalt per annum. The company's Acojec deposit in the Philippines has a production target of 24, 500 tonnes of nickel and 900 tonnes of cobalt per annum.

Zinc

Zinc for three-month delivery lost 1.0% to $2,277 per tonne. Inventories declined 750 tonnes to 631,425 tonnes. The metal faces support and resistance at $2,251 and $2,309, respectively.

Lead

Lead for three-month delivery was unchanged at $2,405 per tonne during early hours trading. Inventories added 1,800 tonnes to close at 205,250 tonnes. Support and resistance levels for lead are at $2,368 and $2,440, respectively.

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