Industrial metals, taking their cue from stronger equities markets, rallied on Thursday as looming strikes in the world mining industry continued to underpin prices, analysts and traders said.
Benchmark copper for delivery in three months rose to $7,465 a tonne during the official London Metal Exchange session, up $175 from Wednesday's close. In New York, copper for July delivery rose 7.95 cents, or 2.4 percent, to $3.3925 a lb on the New York Mercantile Exchange's COMEX division, after dealing between $3.3040 and $3.4255.
"There's not much metals-specific news, but metals are taking some comfort from the fact that equity markets are rallying," analyst Jon Bergtheil at J.P. Morgan said. "Mining shares are doing well, and I think it is lifting the sentiment in the sector," he added.
Mining stocks benefited from stronger metals, with Antofagasta, Rio Tinto, BHP Billiton and Kazakhyms up 2 percent to 3.5 percent. European shares bounced to their highest close in more than a week, with banks and oil producers leading the way, as investors were buoyed by a stronger Wall Street.
"The stock market is recovering, oil's up, there seems to be a little bit of bargain-hunting and we've also seen some fresh buying coming to the market," an LME trader said. Brent crude, which often leads moves in the commodities markets, was 60 cents higher at $70.54 per barrel. The threat of supply disruption at several large producers, combined with limited stocks in LME warehouses, which equate to just over four days of world consumption, meant investors were unwilling to bet on falling prices.
"The strike at two mines in Peru looks imminent now as no agreement has been reached yet," another LME trader said. Union workers at two copper mines and a smelter in Peru owned by Southern Copper Corp broke off wage talks with the company and were threatening to go on strike. Southern Copper, one of the world's largest copper producers, is controlled by Grupo Mexico. Last week, workers at nine mines and process plants in Mexico owned by the company also threatened to go on strike.
More than 400 employees at Xstrata Plc's CCR copper refinery in Montreal were on strike and workers at a number of mines across Chile were threatening walkouts. Nickel surged to $42,375 a tonne, rising more than 6 percent on bargain hunting, despite a modest stock rise.
The metal dipped to a near-four-month low of $38,900 last week, after the LME changed its rules to make more metal available to the market, taking losses to 25 percent since early May, when it hit an all-time high of $51,800.
Nickel ended at $41,900, up $1,900 from Wednesday. Stainless steel demand has shown little sign of slackening despite record prices, Spain's Acerinox said, adding it was still passing on the soaring price of nickel to all customers, except in Asia.
Aluminium was up $11 at $2,729.
China's May aluminium output jumped by 28.6 percent to 955,400 tonnes, the National Bureau of Statistics, said. Tin was up $200 at $14,075, lead was up $50 at $2,350 and zinc was quoted $3,719.5/3,720, against $3,669/3,670.