Short-covering lifts LME copper and aluminium

21 Sep, 2004

London Metal Exchange (LME) copper and aluminium advanced on Monday on technical buying and short-covering, traders said.
"We had some short-covering in copper led by the funds in early London trading this morning, and then buying in COMEX this afternoon encouraged more in LME business," a trader said.
COMEX copper futures climbed to one-month highs on trade and technical buying, but trade was thin ahead of Tuesday's US Federal Reserve meeting on interest rates.
Analysts expected the Fed to raise interest rates by a quarter percentage point. The market was also looking for direction from US housing starts data on Tuesday and durable goods orders on Friday.
"The Fed meeting will be especially critical as markets will be keen to assess just how aggressive the central bank intends to be on raising rates given the (recent) lukewarm stream of data coming out of the US," Man Financial said in a daily report.
"However, we do need a shot in the arm from constructive economic data to help prices higher."
Copper ended at $2,849 a tonne, up $26, while aluminium rose by $43 to $1,753.
The cash-to-threes nearby spreads tightened to $1 backwardation narrowed from a couple of dollars contango.
"There was some borrowing needs from producers and consumers to cover nearby dates," the trader said.
Other metals, with the exception of tin, which eased slightly, made moderate gains.

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