Copper ends up on world demand view
METALS-Copper ends up on world demand view, tin at record
* Copper rally sets its sights on all-time highs
* Mounting supply fears boost tin to new record
* Aluminum buoyed by confirmation of tight supply
* Coming up: U.S. GDP data on Friday
(Updates with U.S. copper closing, analyst comment)
By Chris Kelly and Rebekah Curtis
NEW YORK/LONDON, Jan 27 (Reuters) - Copper climbed to
within 3.5 percent of its all-time peak on Thursday, bucking
general commodity weakness and another large build in London
inventories and instead reflecting its role as a main
beneficiary of global demand growth.
Tin CMSN3 extended its record-setting run on the London
Metal Exchange, hitting a new high at $29,300 a tonne on
mounting supply fears in major exporter Indonesia, while
aluminum CMAL3 posted its biggest one-day advance in three
weeks as traders priced in a narrower market surplus.
LME copper for three-month delivery CMCU3 rallied $191 to
finish at $9,441 a tonne, just $340 away from its Jan. 19
record at $9,781.
The economically sensitive industrial metal pushed higher
on the supportive tone from the U.S. Federal Reserve on
Wednesday, which indicated no intention to back away from its
loose monetary policy. [ID:nN25283937]
"It's a bit of a carry-over from the Fed," Peter Buchanan,
a commodities analyst and senior economist at CIBC in Toronto,
said of copper's firmer tone. "The Fed indicated that it is
going to continue with its QE2 program ... and I think we are
just generally seeing some optimism in recent days over the
global economy's prospects for 2011."
COMEX March copper HGH1 on the New York Mercantile
Exchange jumped 7.15 cents, or 1.7 percent, to settle at
$4.3385 per lb, near the upper end of its $4.2755 to $4.3555
session range.
Technicians eyed short-term technical resistance at the
contract's 20-day moving average as a critical step to overcome
before pushing back up to record highs near $4.50.
(Graphic: link.reuters.com/gad77r )
Copper's gains came despite some near-term demand concerns
centered around a bearish trend in London stockpiles, a
week-long Lunar New Year holiday in top consumer China next
week and the potential for further monetary tightening in
Beijing.
Stocks of copper in LME warehouses continued a recent climb
that has dented short-term confidence in the demand outlook,
last rising 2,575 tonnes to 397,275 tonnes.
This bearish trend backed data from the International
Copper Study Group's latest monthly report showing a small
production surplus of 34,000 tonnes in October, following 7
months of consistent deficit. [ID:nWLA3855]
Longer term, however, analysts remained confident about
demand.
"I don't buy into the story that further Chinese tightening
is going to significantly negatively impact copper demand,"
David Wilson, an analyst at Societe Generale, said.
China accounts for nearly 40 percent of global copper
consumption estimated at around 21 million tonnes for this
year.
Sterling Smith, an analyst for Country Hedging Inc in St.
Paul, Minnesota, said ideas that second-half growth in the U.S.
could be a little bit better than anticipated also worked to
keep prices well bid.
"It speaks well for how strong the market is in the face of
our weaker durable goods and our poor weekly jobs data," he
said. [ID:nN27280337]
In other metals, tin prices CMSN3 rallied to another
record peak -- their fifth in as many sessions -- as supply
threats in Indonesia deepened.
Heavy rains and floods caused by the La Nina weather
pattern have hit tin miners there in recent months, squeezing
supply. [ID:nJKB004265]
Aluminum CMAL3 rose $40 to end at $2,427 a tonne, buoyed
by a first-time confirmation from Deutsche Bank (DBKGn.DE: Quote) that
around 2 million tonnes of the metal are tied up in financing
deals. [ID:nLDE70Q1Z1]
Lead CMPB3 ended up $44 at $2,420 a tonne, but has been
under pressure from stocks in LME warehouses, which at 276,925
tonnes are at their highest since April 1995.
However, recent LME data showing one company controlling 80
to 90 percent of lead stock warrants and cash contracts has
fueled nervousness about nearby supplies.
Metal Prices at 2008 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Mov End 2010 YTD Pct
move
COMEX Cu 433.45 6.75 +1.58 444.70 -2.53
LME Alum 2427.00 40.00 +1.68 2470.00 -1.74
LME Cu 9440.00 190.00 +2.05 9600.00 -1.67
LME Lead 2419.00 43.00 +1.81 2550.00 -5.14
LME Nickel 26495.00 -5.00 -0.02 24750.00 7.05
LME Tin 29075.00 450.00 +1.57 26900.00 8.09
LME Zinc 2260.00 39.00 +1.76 2454.00 -7.91
SHFE Alu 16785.00 60.00 +0.36 16840.00 -0.33
SHFE Cu* 71700.00 900.00 +1.27 71850.00 -0.21
SHFE Zin 18255.00 95.00 +0.52 19475.00 -6.26
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Editing by Walter Bagley)