COPPER has surged to a new 10-month high, with robust manufacturing data from top consumers China and the US bolstering the industrial metal's demand outlook and helping to boost London values through $US6000 a tonne.
Zinc rallied more than 6 per cent to touch $US1865 a tonne, the highest since September last year, while lead and nickel hit $US1968 and $US18,950 respectively, also their highest levels since September.
Aluminium hit $US1981 a tonne, its highest since November, while tin jumped 10 per cent to $US15,150, its highest since mid-June this year on market concern about the scale of long positions for September.
Three-month copper on the London Metal Exchange closed at $US6000 a tonne from $US5719 at the close on Friday. In after-hours business, the metal used in power and construction jumped to $US6040.50 a tonne, a new high dating back to October 1.
At the New York Mercantile Exchange's
COMEX division, copper for September delivery rallied US11.50 cents, or nearly 4.4 per cent, to end at $US2.7385 a pound, another high going back to the first of October.
KEY COMMODITY PRICES: oil, gold, base metals, livestock and wheat
Copper's bullish tone was rooted in economic data showing manufacturing in China, the world's biggest copper consumer, at its strongest in a year in July.
The gains were accelerated as investors bid on rising demand from both China and the United States after better-than-expected data.
US manufacturing contracted in July, but a slower rate than in June, while a 0.3 per cent rise in US construction spending bolstered views that the economy was pulling out of recession.
“There's new money coming into everything,” said Bill O'Neill, partner of Logic Advisors. “It's a money-flow. If you look at these prices and look at the demand outside of China, it's still a little bit hard to put a fundamental bet on the rally.”
Volatile trade has been a feature of the tin market for some months now. Funds have squeezed prices higher through dominant holdings of stocks in
LME registered warehouse and futures.
The latest attempt involves a large position which has bought tin for delivery in September and sold it for December.
Worries that traders or funds will be caught short of the metal pushed the premium for the September contract over the December contract to $US1500 a tonne on Friday.
The premium last traded at $US1300 a tonne. Three-month tin ended at $US14,950 from $US13,700 on Friday.
“Tin has flicked back up after large funds sold it heavily at the close on Friday,” said Citigroup analyst David Thurtell. “The funds were trying to clobber a large long position.”
Aluminium closed up $US80 at $US1970 a tonne. The metal used in transport and packaging has gained more than 25 per cent since the start of the year.
Part of the reason for the price gains is a shortage of nearby supplies. About 70 per cent of the record 4.56 million tonnes of
LME stocks were seen tied up in financial deals to release cash for producers.
“The physical aluminium market is pretty tight, the volume of metal tied up in financing deals is playing a big part and consumers are coming back into the market,” said Gayle Berry, analyst at Barclays Capital.
“Availability in China is pretty limited ... Semi fabricators in China have been increasing output fairly rapidly mainly because of strong domestic demand.”
Stainless steel ingredient nickel closed at $US18,830 a tonne from $US17,950, battery material lead at $US1950 from $US1878 and zinc, used for galvanising steel, was at $US1845 from $US1750.
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