Lme Copper, Aluminium March Higher

But by the midday close, three months copper had eased off its highs on light profit-taking and other selling.

Three months metal peaked at $2,008, fuelled by investment bank buying and short covering as stops were hit at $1,995/$2,000 on the pre-market. But the market struggled to maintain its its foothold above $2,000 during the rings.

Last business was at $2,000, up $29 from Wednesday.

I think we can see it higher, maybe up to $2,030/40, but the brokers will want to sell it now that its above $2,000, one floor trader said.

The declaration by most holders of $2,000 strike November calls on Wednesday added to the strength, another trader said. They wanted to see it higher, he said.

 

The cash/threes backwardation widened further to around $55 from $45 on Wednesday. The premium of December to threes traded as high as $40.

Floor traders are expecting another stocks draw on Friday, with several pegging it at 5-7,000 tonnes after 2,525 tonnes on Tuesday. One trader saw it lower, at 1-2,000 tonnes.

Material was expected to move out from Hamburg and Long Beach, they added.

Aluminium also pushed higher, helped by speculative interest and tighter spreads.

Three months pushed to a two-month high of $1,459, as traders focused on growing tightness in January dates.

The peak was the strongest level since the market touched $1,464 on September 11. Last business was at the $1,459 peak, a rise of $25.

The main feature was narrower spreads, with the cash/threes contango moving in further to $16 from $20/$21 on Wednesday and a normal level of $34 last week. The premium to borrow the January date for a day rose to $8 from $6.

The market is short January and although LME stocks are generally plentiful the material for those dates is in strong hands, traders said. Some traders and analysts said aluminium would need to consolidate its gains before attempting to attack $1,480 and $1,500. The other metals moved higher with copper and aluminium.

Nickel tested the $7,200 level, touching $7,215 but finishing the morning only $55 higher at $7,195.

Prices need to break above the 10-day moving average at $7,252 and then $7,270 to make much progress, chartists said.

Zinc edged higher to $1,064, up $1.50, remaining in a tight range.

A close above $1,072, the short-term uptrend channel, would boost the market, chartist Harry Creates of broker AMT said.

Lead added $3 to $746 and tin rose $25 to $5,950. Alloy finished the morning at $1,302, up from $1,295/97.