Copper jumps to two-week high

Copper jumped to two-week highs on Wednesday as manufacturing surveys in the United States and China and a weaker dollar helped boost sentiment, but gains are expected to be capped by a seasonal lull in demand. Other industrial metals also surged with lead hitting a two-week peak of $1,760 a tonne and nickel gaining more than 8 percent to $16,600, its highest level since late September.
Benchmark copper on the London Metal Exchange touched $5,187.50, the highest since June 15. It ended at $5,090 a tonne from $4,970 at the close on Tuesday. Triggers for higher metals prices on Wednesday included the dollar, which when it falls makes metals priced in the US currency cheaper for holders of other currencies. "It is moving in the right direction, I don't think it can move much faster given underlying economic weakness," said Justin Lennon, analyst at Mitsui Bussan Commodities.
Manufacturing surveys from China, the world's largest consumer of copper, showing the sector extended a recovery in June were another plus. Also lifting sentiment in copper are falling stocks of the metal in LME warehouses, which at around 266,000 tonnes compare with levels around 500,000 tonnes in early April. LME copper has gained about 60 percent in the first half of this year, driven primarily by Chinese buying for stockpiles.
Aluminium stocks fell 3,525 tonnes but remained near record levels at around 4.4 million tonnes. However, traders said about 70 percent of this material is tied up - possibly until next May - in financing deals. Shortage of aluminium in the short term is one reason why the metal used in transport and packaging has gained about 15 percent since the beginning of June. "There still persists a significant state of supply overhang in the market irrespective of recent price performance," Barclays Capital said in a note.
Aluminium closed at $1,663 a tonne from $1,630 on Tuesday. Zinc at $1,595 a tonne from $1,545, lead at $1,739 from $1,690 and nickel at $16,450 from $15,350 on Tuesday. Tin was untraded at the close, but bid at $14,500 from Tuesday's last bid at $14,150. Earlier it rose more than 6 percent to $15,000. Worries about nearby supplies of tin have pushed the premium for cash material over the three-month contract to around $82 a tonne from a discount of around $40 a tonne mid-June.