Copper raced to a record high on Thursday, with sentiment stoked by strong economic data from top consumer China and persistent supply fears as inventories fell. Three-month copper on the London Metal Exchange hit a record $8,966 a tonne, compared with $8,760 at the close on Wednesday.
The previous record peak was $8,940, touched in July 2008, before prices slumped to below $3,000 in late 2008 as the global economic slump hit commodity prices. The metal used in power and construction later gave up some gains, and was untraded at the close but last bid at $8,830. Other metals were also firm with battery material lead at its highest since January at $2,650 a tonne. Aluminium hit a two-year high at $2,500 a tonne.
Also aiding sentiment in recent weeks has been the trend of falling London Metal Exchange inventories. Latest data showed copper stocks slipped 1,000 tonnes to 362,950 tonnes.. They are now down by a third from 6-1/2 year highs above 555,000 tonnes in mid-February. "(The record high) underlines the tight market situation in copper and it's even more remarkable considering euro/dollar is trading a bit lower," said Arne Lohmann Rasmussen, chief analyst at Danske Bank.
Data showed China's industrial production grew 13.1 percent in October from a year before. Production of refined copper dropped slightly in October due to the week-long National Day holidays and repairs at a large smelter. Retail sales increased by 18.6 percent, while headline consumer inflation hit a 25-month high of 4.4 percent in October and new yuan loans also beat market expectations. "The China data underwrite a picture of a strong metal demand environment," Barclays Capital said in a note.
Copper has now rallied more than 40 percent off lows hit in June, and is about 20 percent higher in the year to date. Lead ended at $2,610 a tonne versus Wednesday's close of $2,604 a tonne. Aluminium ended at $2,458 versus $2,448. Zinc closed at $2,542 a tonne versus $2,522. Tin ended at $27,000 a tonne versus $26,950 while nickel was at $24,000 a tonne from $24,155.