London Metal Exchange (LME) prices ended strongly on Thursday on persistent fund buying in a market dominated by tight supply, dealers said. "Whatever is driving fund interest there's no indication yet of a consolidation phase, let alone a corrective one, the only way is up," a dealer said.
Another said: "It is the same picture, onwards and upwards until there is a major sell-off, but we can't see that happening at the moment."
Fundamentals are broadly supportive for copper, aluminium, lead and zinc, all of which hit new multi-year highs this week.
"It just seems as though the weight of money is ruling these markets as it is hard to justify these prices, given the outlook," analyst William Adams of Basemetals.com said. "At some stage the boot will be on the other foot and the sellers will start to scramble over themselves to sell, but there is no sign of that happening just yet."
Copper ended the floor sessions at $4,368 a tonne, against Wednesday's kerb close of $4,246 but off an earlier record high of $4,380.
Dealers said the market was gearing up for a run of tight nearby dates starting next week, with the December traded options declarations due on Wednesday.
China's State Reserves Bureau will hold a fourth auction for another 20,000 tonnes of copper on December 7 in an effort to drive down global prices.
The SRB sold 14,000 tonnes of 20,000 tonnes on offer at auction on Wednesday, when offer prices were higher than expected, which propelled copper prices higher.
Aluminium was at $2,197, up $58 but off an earlier high of $2,208, a level last seen in May 1989 when it peaked at $2,235.
Zinc gained $50 to $1,765, lifted by news that Korea Zinc Co Ltd, the world's biggest refiner of the metal, will stop operations at its US unit, Big River Zinc Corporation, by February, 2006.
Zinc prices were last that high in March 1989, when they reached $2,000. Lead was up $25 to $1,068 but $2 off the day's high and a record high for the market as a dollar-traded contract.
Nickel was at $12,775, against $12,800, while tin was at $6,450, from $6,125/6,150.
But these metals were well below their last cycle highs reached in the first half of 2004. "It almost seems that the funds have ignored these two metals as they do not have the liquidity," Adams said.
Nickel and tin may represent the true fundamental value of the market, while other metals have distorted prices, he added.