Lead touches new high

Industrial metal lead finished slightly lower after hitting a fresh high above $2,900 per tonne on Thursday, which had taken its gains since the start of the year to more than 70 percent Other metals on the London Metal Exchange were steady, which supported mining shares on the London stock market.
Lead, used mainly in batteries, is much in demand by Chinese industry, particularly the car-making sector, which is expanding rapidly as the country industrialises. This strong demand combined with restricted supply has attracted investors to lead, in preference to higher-profile metals such as copper, traders said.
"Copper is now doing nothing, nickel is doing nothing and zinc is doing nothing so people are asking, 'Where do we invest?' and the money is going into lead," a European metals dealer said. After trading as high as $2,912, lead fell back to close at $2,845, down $41 from Wednesday's close.
"We feel that there is still room to the upside," Barclays Capital said. "Supply shortfalls are limiting Chinese refined output growth at a time when consumption is booming."
The International Lead and Zinc Study Group research group has forecast use of the metal will exceed production by 50,000 tonnes this year. Shipping delays at the Magellan mine in Australia after a health scare earlier this year and production cuts by Chinese smelters are among the factors crimping supply.
Mining firms BHP Billiton, Rio Tinto and Xstrata were all up more than 1.4 percent and among the four largest gainers on the FTSE 100, which fell 0.57 percent. Copper, often considered a gauge of the metals markets in particular and economic growth in general, was steady at $7,860 from $7,825 at the close on Wednesday.
In New York, copper for September delivery settled up 4.85 cents to $3.5935 a lb at the New York Mercantile Exchange's COMEX division, near the top of its $3.53 to $3.5985 session range.
Strikes at mines, both actual and threatened, were dominating the market. Management and the workers' union at the Collahuasi mine in Chile have until Friday to agree a new pay deal, while Mexico's miners walked off the job in a one-day strike on Thursday in a protest over safety conditions. Elsewhere, strikes rumble on at a large refinery in Canada and at Codelco's copper mines in Chile.
"How copper moves depends on what happens or doesn't happen in Mexico and Chile," the trader said. In the longer term prices would fall, but before then supply disruption gave it the potential to take a sharp jump, J.P. Morgan said in a report. "There remains scope for copper ... to experience a short term spike higher," it said.
Strikes created a floor in the market but a stronger dollar, due to better-than-expected Institute for Supply Management numbers up at 60.7 from 59.7 in May, kept a lid on the prices. In other metals, aluminium gained $8 at $2,790 and nickel, which has tumbled since hitting an all-time high of $51,800 in May, ended at $36,000, down $300 from Wednesday's close. Tin fell $50 to $14,050/14,100 and zinc was down $20 at $3,430.