Copper touches new peak

Copper ended higher on the London Metal Exchange (LME) on Tuesday touching a new record on gains from a fund-driven rally that has added almost five percent to prices in the past couple of weeks.
The three-months price ended at $3,970 a tonne, up $53 from Monday's kerb close and just $1 off an all-time high reached earlier on Tuesday. Dealers said the market remained illiquid, which typically increases price volatility.
"If New York and Asia run with this later then we could wake up tomorrow to a market price beginning with a four," a dealer said.
"That said, there is still a lot of tension in the market as it's the funds behind the wheel, while some traders remain cautious of a sell-off."
Dealers noted a rise in cancelled warrants of some 4,000 tonnes, despite a small increase in LME stocks.
Still, some supply worries appeared to have eased.
On Tuesday, Moses Banda, special economic adviser to Zambian President Levy Mwanawasa, said he expected the Nkana and Mufulira copper smelters to return to full production by the end of the week as the country resolved recent fuel problems.
Zambia has set a production target of 550,000 tonnes of finished product this year.
Aluminium was at $1,932, up $28. Alcoa Inc, the world's biggest aluminium producer, said on Monday that its third-quarter net income rose slightly just as a 13-percent jump in sales helped offset falling aluminium prices and rising energy and raw material costs.
"If the alumina market indeed stays in deficit for the suggested period, then we see upside potential in LME aluminium prices beyond our current target of $2,000," Barclays Capital said in a daily report.
Zinc was at $1,495, up $11, but off an earlier fresh eight-year high of $1,503. Nickel was at $12,725/750, up $25.
Nickel prices have lost almost 15 percent this year as its main consumer, the stainless steel sector, grappled with a growing surplus and slashed output in the past six months.
Dealers reckoned the market could drop another $2,000 by the end of this year as steel makers have rolled over cuts. Lead was at $965 from $962, while tin was at $6,650/675, up $50.