Copper rallied on Wednesday to a 27-month top, on expectations of renewed liquidity measures in the United States, the world's largest economy. Tin hit a record high, and battery material lead hit its highest since January. Benchmark copper prices hit a session high of $8,430 a tonne, their highest since July 2008 and have been hitting two year highs since late last month, responding to a weaker dollar and expectations of fresh US monetary easing.
-- Tin, lead jump
The metal used in power and construction finished at $8,362 versus Tuesday's close of $8,350. "I think QE (quantitative monetary easing) is probably the major driver right now," said analyst John Meyer of Fairfax. "The implication of low interest rates in the US for a longer period of time, any printing of dollars, increases the money supply, money therefore moves into other asset classes, particularly anything physical," he added.
"The dollar has continued to weaken as a result of the FOMC minutes, with that weakness and the prospects of QE2 (a second round of QE) giving the metals a lift heading into the afternoon," said analyst Leon Westgate of Standard Bank in a note. Copper is benefiting from a tightening market as stocks in LME warehouses have tumbled more than 30 percent since the middle of February.
The latest data showed LME stocks down 475 tonnes to 371,275 tonnes, having fallen from seven-year highs above 555,000 in late February. Tin finished at $26,775 a tonne versus Tuesday's close of $26,500 a tonne, after hitting a record high of $27,100. The metal has hit a succession of highs, underpinned by tight supply from top exporter Indonesia Production there is set to fall in coming months as the rainy season will flood onshore mines and lash offshore miners with high waves.
Indonesia's refined tin exports fell 11 percent to 6,904.37 tonnes in September, from 7,755.30 tonnes in the same month a year ago, trade data showed on Wednesday. Lead ended at $2,435 a tonne versus $2,375 a tonne at Tuesday's close. It earlier hit its highest level since January at $2,440.25 a tonne. Aluminium wound up at $2,417 from Tuesday's close of $2,437 a tonne, having earlier hit its highest level since April at $2,447 a tonne. Zinc ended at $2,410 from Tuesday's close of $2,370, also having hit its highest level since April, when it touched $2,419 a tonne. Nickel finished at $24,400 a tonne versus Tuesday's close of $24,050 a tonne.
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