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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Connemara Mining (LON:CON) has raised £1.05 million for an expanded drill programme on its zinc assets in Ireland. The programme will be focused on the Stonepark zinc discovery and the Thurles area near the existing Lisheen zinc mine, operated by Vedanta Resources (LON:VED). Lisheen is one one of the largest producers of Zinc concentrates in Europe.

Also today, Minco PLC (LON:MIO) said its joint venture partner for the Pallas Green zinc project, Xstrata (LON:XTA) has completed a preliminary assessment of the project, and considers it to be economic at its current stage.

What’s more, Xstrata has increased the inferred resource there substantially. The new resource of 17.6 million tonnes at a 6 percent zinc cut-off is 56 percent greater in tonnage than the previously published JORC compliant resource published in August 2009.

Five rigs are already at work on the Stonepark zinc property in Limerick, where a total of 65 holes are planned for this year. Drilling has also started in the Thurles area to follow up targets identified in earlier prospecting.

At Pallas Green, Xstrata Zinc is proposing a €13 million exploration and development programme for 2011. The proposed budget comprises continued definition and exploration drilling for €10 million coupled with an initial pre-feasibility study which is estimated to cost €3 million. The will be two-thirds infill definition work and one third exploration, for a total 100,000 metres in 230 holes.

What makes the recent developments at Stonepark and Pallas Green even more interesting is the fact that they are literally next to each other and that Minco and Connemara are in joint ventures with large and respectable partners in the industry: Connemara controls 25 percent of Stonepark while Canada’s Teck Resources (TSX:TCK, NYSE:TCK) has 75 percent, and Minco holds a 23.6 percent participating interest in Pallas Green, with Xstrata’s zinc business holding the remainder.

Zinc could be a commodity to watch. Commentators and analysts have recently been pointing out that over the next few years demand may exceed supply, as demand for galvanized steel is expected to soar in the wake of increasing migration from the countryside to cities particularly in China and India.

China currently accounts for around 30 percent of the global zinc demand, and its construction industry is growing more than 10 percent every year. Car production is also growing.

Credit Suisse expects a zinc supply shortfall in 2016, while RBC Capital Markets would not be surprised if it occurred as early as 2014.

Considering that the partners in the Stonepark and Pallas Green projects are already very upbeat on their respective prospects, a hike in zinc prices while they are being developed hast the potential to massively improve their economics. Both mines are currently planned to start production in 2017.

Irish broker Davy commented on the news regarding new zinc mines in the the country, with a particular focus on the Minco story. It noted that Ireland has a long history of zinc and lead mining with a major new project discovered nearly every decade over the last 40 years.

“There are very good indications that the Pallas Green project will join this list with a proposed mine start-up date of 2017. While confirmed economic with substantial grades of zinc and lead, there is still some way to go to establish the ultimate size and economic footprint.”

Davy views the positive aspect of the work in the wider Pallas Green area as being that the presence of widespread and ubiquitous mineralisation points to ongoing future additions to resources.

“In fact, management at Minco believes that the higher-grade core of the deposit still remains to be established. This refers to the possibility that deeper drilling will locate mineralisation adjacent to a feeder fault line, a defining characteristic of the Irish zinc ore fields, and one that has delivered really good grades and tonnes in other Irish zinc projects,” it added.

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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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LME Copper climbed as much as 0.3 percent to $8,316.50 a metric ton Tuesday. today.

The contract for delivery in three months traded at $8,307 a ton by 1.00 a.m London time a.m. Zinc gained 1 percent to $2,160.

The March-delivery contract on the Shanghai Futures Exchange dropped 0.9 percent to 62,870 yuan a ton.

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Zinc has finally shown some gains this year and in the coming year also the metal is set to move up breaking the downward trend for quite sometime.

Cashing in on this upward movement, China sold almost all of the 50,000 tonnes of zinc put up for sale at an auction of state reserves on November 9.

The multi-month zinc rally since the June low of $1,600/tonne has further to run in the coming year, and may close around the current level would presage further gains towards the January high of US$2,736/tonne. According to analysts, Zinc prices will benefit from the broad based rally in base metals, as well as idiosyncratic supply dynamics, and these factors will likely see the metal trade within the $2,200-2,800/tonne range over coming months.

Analysts have forecast that the three-month zinc will average $2,450/tonne. Experts said zinc prices will remain well supported going forward, and forecast an average price of $2,550/tonne in 2012.

The US Fed’s decision to purchase an additional $600bn in treasuries over the coming months in a ramping up of its quantitative easing strategy will provide ample liquidity to markets, and will see risky assets head higher over the medium term.

The Fed’s actions will also put downside pressure on the US dollar, which has an inverse relationship with commodity prices. Again, the strong demand in emerging markets, combined with limits to output increases as China scales back some production, will see the zinc surplus narrow.

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