LME aluminium, copper close strongly on fund buying

22 Sep, 2004

London Metal Exchange (LME) aluminium and copper ended ring trading around five-month peaks on Tuesday, advancing on fund buying, traders said.
Aluminium rose $49 to end the rings at $1,802 a tonne - the highest since April 21 - while copper ended at $2,900 from $2,849.
"It was mainly the funds that were buying, although there were also good technical factors," a trader said.
"Aluminium was the key buying market, triggering interest in copper. Buy-stops were then triggered and there is potentially more to come given current momentum from the funds and further technical potential."
Man Financial analyst Edward Meir said: "Aluminium is looking very strong. We have broken through some key technical points in recent days and the funds have really piled in.
"Strike talks at copper and aluminium plants haven't been going well, and its all helping sentiment," he said.
Traders said funds bought about 12,000 lots of aluminium on Tuesday, compared with about 2,000 typically.
Bullish comments by analysts for future aluminium prices at an aluminium conference in Oslo also added support, traders said.
The cash to three months spread was $8/11 backwardation after moving from a small contango on Monday.
Copper was at about $75 backwardation at the kerb close compared with $53.50 late last week.
Zinc rose $9 to $990 despite an 18,025 tonne rise in LME inventories following a delivery into Singapore.
Lead rose $34 to $906. Nickel was relatively steady at $13,375, but tin eased $50 to $8,950.
Market attention focused on a US interest rate decision at 1815 GMT. The Federal Open Market Committee is expected to raise interest rates by a quarter of a percentage point.

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