LME copper ends higher on tight supply

16 Jun, 2005

Base metals prices rose in Wednesday's London Metal Exchange floor trading, supported by copper gaining on tight supply, traders said. Technical tightness mostly drove copper, with the benchmark cash/threes spread backwardation widening some $10 to $235 a tonne - the highest for 8-1/2 years.
"We saw technical buying and then the dollar weakened a little against the euro," a trader said.
"If the market advances further in Asia tomorrow then prices could mount a real challenge of $3,300 and possibly beyond, although there's still wariness of another slide."
Three-months last traded at $3,287, a $37 advance from Tuesday's kerb close.
Traders said LME copper was gripped by tightness through to September, with warehouse inventories at 31-year lows.
However, prices have tried to breach $3,300 three times since Friday, but lacked the buying momentum to do so.
The market scored an all-time high of $3,336 on April 12.
Mine supply is rising, which will push refined metal into surplus at some point, but potential short sellers are absent.
Zinc bounced back after a three-day run of big inventory increases ended with a 350-tonne fall.
The price closed at $1,292 from a previous $1,260.
Aluminium extended a rise from $1,700, ending at $1,735, up $25.
Nickel rose $195 to $16,195, lead was at $967/968, versus $966, and tin at $7,590, against $7,600.

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