Copper prices hit a two-month high on Wednesday, supported by worries over supply due to a labour dispute in Peru and by a weaker dollar, while aluminium hit a four-month high. Copper for three-month delivery on the London Metal Exchange touched $8,795 per tonne, its highest since April 17 when it hit a record high of $8,880 a tonne.
It closed at $8,720 from $8,610 at the close on Tuesday. Aluminium ended at $3,200 on Tuesday from $3,155 on Tuesday and compared with an earlier $3,205 a tonne - the highest level since March 10. "The main reason (for the rise in copper) is the strike in Peru ... Nobody knows how long these things are going to take to sort out," said Daniel Smith, an analyst at Standard Chartered.
A mining strike in Peru entered its third day on Wednesday, affecting production at some mines, while workers at others reported for duty and said they were still deciding whether to join the nationwide walkout. Miners in Mexico also announced a one-hour stoppage on Friday.
As a sign of tightness in the market, copper's backwardation - the premium for cash material over the three-month price - rose to $181 per tonne, near a two-year peak of $189 touched on June 16. Zinc ended at $1,865 from $1,930 a tonne on Tuesday. Earlier it fell by 4 percent to $1,854.75 a tonne.
Stocks of zinc in LME warehouses have risen by more than 60 percent to above 150,000 tonnes since the start of the year. They are at their highest level since September 2006. Lead closed at $1,705 versus $1,766 on Tuesday, tin edged down to $23,200 from $23,600 on Tuesday and nickel slipped to $21,150 a tonne, down from $21,550 a tonne.