Fund selling continued to put pressure on the base metal market in the past week. On balance though, prices managed to rebound as trade buyers encouraged by sound fundamentals, such as falling stocks in London Metal Exchange warehouses and perhaps the weaker dollar, saw low prices as opportunities. At the same time, figures for last year's trading volumes on the London Metal Exchange which rose by 35 percent from 35,289,932 lots in 1993 to 47,687,717 lots in 1994 showed just how important fund activity had become. Fund liquidation pushed three month aluminium down to a low of 1,840 dollars a tonne last week before positive fundamentals notably a 19,100 tonne drop in LME stocks late last week, followed by another drop of 17,625 tonnes early this week brought it backup to 1,946 dollars. Meanwhile, the news from the International Primary Aluminium Institute that the daily production rate had risen in January was a setback for the market, but caused very little surprise.
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