London Metal Exchange (LME) prices ended higher on Wednesday on light buying after uneventful options expires, with copper, aluminium and zinc leading the way, analysts and dealers said. "The market is ticking over. Copper, aluminium and zinc are higher but in very slim volumes and there's nothing much behind the moves," one trader said.
Copper closed at $3,943 a tonne, up from $3,905 at Tuesday's close. "Copper looks pretty lacklustre. I think we'll see volumes remain thin for the rest of the week and people will take a view about the direction once they have returned home from LME week," ABN Amro commodity analyst Nick Moore said.
"However the producers are expecting another bonanza year in 2006, although not like 2005," he added.
On Tuesday the world's largest producer, Codelco of Chile, said it expected the copper market to be in surplus by around 200,000-300,000 tonnes in 2006 and prices would ease toward $2,200-2,400 over the next three years.
Copper hit a record $4,018 a tonne last month, driven higher by speculative buying and soaring consumption in China.
Worries of a repeat of last year's 16 percent sell-off on the day after the exchange's annual dinner in London on Tuesday proved unfounded.
"It's all been a bit disappointing," the first trader said.
Late morning expires of November-traded options passed without incident as copper in particular stayed comfortably away from the major open interest strikes at $3,800 and $4,200.
Dealers said copper was likely to range $50 either side of $3,900 in the short term.
"Some of the older hands have a hard time believing copper can stay at these levels, but you can't argue with the price," a second trader said.
Aluminium was at $2,000, up $20, while nickel was steady at $11,650.
"The push in aluminium looks to be speculative buyers looking for stops. It's off a bit since the kerb. We'll have to see if there is any follow through," a floor trader said.
Zinc was at $1,545, up $14, while lead was at $941, gaining $4. Tin was flat at $6,300.