LONDON – Copper and aluminium rose to their highest levels in over a year on Wednesday, on the back of fresh investment buying after fears eased about Dubai’s debt problems and upbeat data bolstered the recovery picture.
Lead hit an 18-month high, while zinc was its highest since March 2008, as world stocks advanced for a third straight session with anxiety over Dubai’s debt problems taking a back seat. Gold touched a fresh record high.Copper for three-months delivery on the London Metal Exchange rose to US$7 170 a ton, its highest since September 2008 while fund buying pushed aluminium to US$2 165,25 a ton, its loftiest since late October 2008.At the close, copper, used in power and construction, was US$50 higher at US$7 125 a ton, while aluminium gained US$54 to US$2 157, as investors returned to the market after taking fright last week when news emerged of Dubai World’s debt problems.’Metals are much more receptive to good news than bad news,’ Abe Ulusal, an analyst at Mitsui Bussan Commodities in New York said. ‘We see renewed fund buying in copper after the concerns over Dubai debt crisis faded away,’ he said.’We’re seeing a bit of a relief rally,’ said Robin Bhar, an analyst at Calyon. ‘Because this domino threat from Dubai hasn’t yet materialised and does not pose as much of a threat to the global recovery as Lehman Brothers did last year.’Copper has risen more than 130 per cent this year, on course for its biggest annual increase since at least 1978. But it remains some way off a record peak of US$8 940 struck in July last year, before the collapse of global markets in the last quarter.Data showed that the US labour market improved in November, with the number of jobs lost in the private sector falling again. The traders will be watching today’s non-farm payrolls data.DESPITE HIGHER STOCKSAnalysts added that sentiment was supported by data from the day before showing China’s economy was ending the year on a strong note, laying the foundations for solid expansion in 2010 from the world’s top copper consumer.Copper prices are continuing to climb despite demand from China cooling off and stocks of copper at LME warehouses continuing to plough higher. Stocks last rose 2 000 tons to 443 000 tons, their highest level since late April.’Regardless of easing imports from China and slackening physical demand, sentiment remains upbeat for base metals,’ said Andrey Kryuchenkov, an analyst at VTB Capital.’Investor interest has yet to dry up, and funds are still playing on higher prices next year with persistent weakness in the dollar and amid a continuous flow of improving macro data.’Aluminium, used in transport and packaging, was at US$2 157 from US$2 103. Aluminium inventories fell 3 800 tons, but were still near record highs in the region of 4,6 million tons.Zinc rallied to US$2 437 a ton, its highest since end-March last year, before closing at US$2 420 from US$2 372.Tin was last bid at US$15 225 from US$15 200 and nickel was at US$16 450 from US$16 295. – Nampa-Reuters
