Aluminium futures closed strongly on Thursday on the London Metal Exchange (LME), just below an earlier 10-year peak on fund buying, dealers said. Aluminium closed at $2,014 in London versus $2,000 on Wednesday. "There has been incremental fund buying in aluminium and this is a good close," one dealer said.
The market touched $2,019 in electronic trade earlier, its highest since February 1995 and traders expected a move towards $2,050 in the near term.
Analysts said rising demand for aluminium and high oil prices - production of the metal is energy intensive - meant the price outlook was positive.
"I believe that the whole market is friendly towards aluminium and based on fundamentals it deserves to be in a firm upward trend, so it comes as no surprise to see it establishing above $2,000," Barclays Capital analyst Ingrid Sternby said.
However other market watchers urged caution.
"There is an angle that some are taking about power-related closures which has people enthused," ABN Amro global commodity analyst Nick Moore said.
"There may be closures in Europe and North America, but those will be offset by expansion in the Middle East and China so people need to be a little cautious.
"The concern that I have is that aluminium is one of the most economically geared of the metals and if we have another 100 basis points of Federal Reserve tightening, that could moderate demand growth," he said.
Copper was little changed, ending $2 lower at $3,941.
Traders noted fresh buying in copper alongside aluminium but speculated concern about rising stocks in China had dented sentiment at the kerb.
"Copper was disappointing. It showed some promise early on but it didn't attract any follow through and buyers backed off," the trader said.
"I think there is some nervousness ahead of the Shanghai Futures Exchange inventory data on Friday," he added.
Chinese state media reported on Thursday that Beijing would release copper stocks from its reserves, confirming widespread industry expectations that the State Reserves Bureau would intervene in the market.
Zinc rose $5 to $1,550, while lead gained $27 at $968. Tin was $40 up at $6,340/50 but nickel languished $120 lower at $11,550.