Copper rose to an 8-month high above $5,000 a tonne on Tuesday, as improving economic sentiment and a weaker dollar supported industrial metals, while aluminium hit a 6-month high on signs of stronger demand.
Copper for three-months delivery on the London Metal Exchange closed at $5,170 a tonne from $4,980 on Monday, and hit a session high of $5,199.50, its highest since 15.October. Recent improvement in economic data has helped copper, used in power and construction, gain by 6.6 percent so far in June.
Data last week showed US manufacturing shrank at a slower-than-expected rate in May while in China, the world's third-biggest economy, industrial activity expanded in the month. "Sentiment is very strong. There is definitely a lot of interest again," said Stephen Briggs, commodity strategist at RBS Global Banking & Markets, citing a weaker dollar and a recent improvement in economic data.
The rally reached across the complex, with tin at $15,775 from $14,900, having hit an 8-month high of $15,800. Copper is 65 percent higher year-to-date, largely spurred by Chinese stockpiling, but analysts warn this supportive buying from the world's biggest consumer appears to be waning.
Falling stocks of copper in LME warehouses also helped boost confidence. Inventories fell 1,500 tonnes to 296,350 tonnes. Aluminium, used in transport and packaging, traded at $1,640 from $1,622. It hit a session high of $1,664, its highest since early December. In recent sessions, aluminium prices have benefited from a rise in material tagged for delivery, which suggests the possibility of stronger demand.
Cancelled warrants - metal tagged for delivery - were at 117,475 tonnes on Monday, compared to 46,800 tonnes on May 8. "This upturn in cancelled warrants is metal that is going to be finding its way into China to make up for the trader held metal that is not being released for consumption," said David Wilson, director of metals research at Societe Generale.
Battery material lead was at $1,730 from $1,669. It hit a session high of $1,735, its highest since early October. Steel making ingredient nickel traded at $15,000 from $14,300 and hit $14,800, its highest since early October. Zinc was at $1,605 a tonne from $1,545. It hit a session high of $1,620, its highest since May 7.