London Metal Exchange (LME) prices for copper, aluminium, lead and zinc ended near their highs in floor trading on Wednesday as supply worries spurred fund buying, dealers said.
"The funds need little encouragement to spark buying and recent announcements on supply worries in Asia and South America were taken as a further signal to buy against metals that are already tight for nearby delivery," a dealer said.
"Prices are technically overbought and might need a correction in the coming sessions but that doesn't seem to bother the funds, who often buy regardless."
Funds were emboldened by recent supply news from Chile, where production was down more than six percent in October compared with last year.
Bullish sentiment was cemented after an announcement by Freeport-McMoRan Copper & Gold Inc on Tuesday that copper and gold output from its Grasberg mine in Indonesia was running below expectations.
Three months copper ended at $4,246 a tonne, up $13 from Tuesday's kerb close.
An auction by a Chinese government agency of 20,000 tonnes of copper saw higher offers than expected for 14,000, which pushed copper to a record high of $4,270 in Asian trade.
And the funds' appetite for metals may be rising after British fund manager Schroders on Tuesday launched a new fund to meet demand for investment commodities.
Jelle Beenen, head of commodities and quantitative strategies at Dutch pension fund PGGM Investments, told a London metals conference on Wednesday that the firm wanted investment in commodities. Speaking at the same event, Stephen Briggs, economist at SG Corporate and Investment Banking, said: "This has been a very extended cycle - it is more extended than the bull market of the late 1980s, but it has not reached the peaks yet."
Aluminium ended at $2,139, up $15, after touching a fresh 10-1/2-year peak of $2,147.50.
On Monday the world's largest miner, BHP Billiton said it saw world aluminium consumption rising by five percent per annum until 2010 to above 50 million tonnes by 2015 from current levels of around 32 million tonnes.
Zinc was at $1,715, up $16, after earlier hitting a new 15-year peak of $1,728.50.
Lead was at $1,043, up $23 and just $5 off an earlier record peak for the market as a dollar-traded contract. Nickel ended at $12,800, down $200, while tin was at $6,125/150, up $45.
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