Zinc hits fresh record high

Dwindling stocks pushed zinc to a new record high on the London Metal Exchange (LME) on Monday and analysts saw the metal looking to reach $5,000 per tonne on strong demand.
"Further falls in LME stocks are likely to tighten the zinc market further and coupled with any production problems, could push prices towards $5,000," analyst Robin Bhar at UBS said in a report.
Robust demand from the auto and construction sectors had boosted use of zinc in galvanised steel and die-casting, while the supply side had been severely constrained by years of under-investment in new mines and currently tight concentrate markets, Bhar said.
Zinc touched a fresh record high of $4,200 before closing at $4,170, up $5 from its final price on Friday.
Zinc inventories in LME warehouses were at their lowest in more than a decade at 108,950 tonnes, down by 1,850 and against average daily world consumption of around 29,000 tonnes. The price of zinc has more than doubled since the start of 2006, while stocks have fallen by over 80 percent since their peak in mid-2005.
Lead ended the final kerb session at $1,587, against $1,599/1,600 on Friday when it hit a new contract high of $1,625. Lead stocks have fallen to 44,725 tonnes, down by some 60 percent since their peak in mid-June 2006.
Other metals were dragged down by weaker sentiment in reaction to data released on Friday showing US gross domestic product grew at an annualised 1.6 percent in the third quarter, the lowest rate since the first quarter of 2003.
"We think it is dangerous to count on metal prices to continue their advance in a slow-growth type of US environment," analyst Edward Meir at Man Financial said in a report.
On the back of sluggish US data, the London Stock Exchange traded lower and Kazakhmys, BHP Billiton, Anglo American, Vedanta and Xstrata were among the 10 biggest losers.
Copper for delivery in three months eased to $7,370 from $7,470 at Friday's close. Stocks in LME-registered warehouses came in at 129,475 tonnes, up by 2,725 and by 18 percent since mid-October.
On Friday China said it would raise the export tax on copper, nickel, aluminium and other products to 15 percent.
China's copper imports and aluminium exports rose in September against August, customs data showed, as investors sought to do business before the new taxes took effect.
On a net basis, China imported 46,767 tonnes of refined copper in September, an increase of 2 percent versus August. But Chinese copper imports are still half of what they were in September last year.
The tax news did not cause a reaction In the copper futures market. "Although these changes may sound impressive, they should not have a significant impact on the refined copper market," analyst Michael Widmer at Calyon said in a note.
"China has never been a significant exporter of refined metal."
Aluminium ended trading at $2,808, down $7 from Friday's close.
The world aluminium market will turn from deficit to surplus next year and the glut will widen in 2008 as output will grow more rapidly than demand, Japanese trading firm Marubeni Corp said.
Tin ended the kerb at $10,050, down $300, and nickel was down $450 from its last indicated price on Friday.