LME Aluminum, Zinc Higher Ahead Of 3rd Qtr End

Base metals on the London Metal Exchange ralliedWednesday as fresh investor inflow and short covering lifted LME aluminum andzinc ahead of Friday's end to the third quarter. The buoyant tone will carry base metals through to the end of the week asspeculative players look for favorable third-quarter results, traders andanalysts said, although physical players seem to be waiting on the sidelines,exacerbating choppy price movements. LME zinc peaked at $3028/metric ton, up 3% from Tuesday's kerb, whilealuminum fell just shy of $2,520/metric ton, levels last seen at the beginningof September. LME copper failed to close above $8,000/ton, while LME tin and lead both heldclose to the week's highs. The rally in LME base metals this afternoon is down to short-covering, whilethe physical side of the market remains on the sidelines, said JPMorgan'sMichael Jansen. Short positions from the credit liquidity problem are beingpushed out of the market, he said, but the physical side needs to enter tosustain the rally. "These kinds of rallies are nasty and ultimately not sustained," Jansen said. Looking to next week, at least two major banks have signaled they intend toput "significant" fourth-quarter allocation into precious metals, commoditiesand energy, said one LME broker, "therefore customers are worried that priceswill open higher on Monday and are getting in now," he said. Ongoing dollar weakness is also underpinning the resurgent complex, as areexpectations of another U.S. interest rate cut. On Tuesday, U.S. durable goods data for August came in lower than expected,down 4.7%, while the dollar hit a fresh low against the euro of 1.4163. Prices in dollar a metric ton. 3 Months Metal Bid-Ask Change from Tuesday PM kerb Copper 7939.0-7940.0 Dn 51 Lead 3445.0-3450.0 Up 40 Zinc 2985.0-2987.0 Up 65 Aluminum 2468.0-2470.0 Up 13 Nickel 32400.0-32500.0 Up 145 Tin 15250.0-15300.0 Dn 50 Aluminum Alloy 2195.0-2205.0 Up 5 Aluminum Alloy 2240.0-2250.0 Up 20.