Tin Advances to Record; Copper, Zinc Climb to Highest in a Month

Tin jumped to a record, and copper and zinc climbed to one-month highs on optimism global economic growth will sustain demand for industrial metals. Lead advanced to the highest level in three years and aluminum reached the highest price since September 2008.

Three-month delivery tin on the London Metal Exchange rose as much as 1.1 percent to $32,915 a metric ton. Copper gained as much as 1.8 percent to $9,839.50 a ton, the highest price since March 7, as the dollar slumped to the lowest since December 2009 against a six-currency basket.

“Investors are in a good mood and feeling positive about the global economy,” said Li Peiying, an analyst at Essence Futures Co. in Beijing. “It’s not just metals. Inflation expectations and the weaker dollar are really helping the rally in commodities today.”

The dollar dropped to the lowest since January 2010 versus the euro after the European Central Bank yesterday boosted borrowing costs for the first time in almost three years to combat inflation. Gold surged to a record, while oil traded near the highest level since September 2008.

Copper in London traded at $9,820 a ton at 3:06 p.m. Singapore time, up 4.9 percent this week, the largest weekly increase since Feb. 4, even as China this week raised interest rates for the fourth time in less than six months. Fewer Americans filed first-time claims for unemployment insurance last week, adding to signs the U.S. economy is recovering.

‘More Optimistic’

The “more optimistic tone” came after Rio Tinto Group, the third-largest mining company, said “China demand is expected to outpace supply, despite China’s government increasing interest rates,” analysts led by Mark Pervan at Australia and New Zealand Banking Group Ltd. wrote in a note today. ANZ yesterday raised its 2011 average copper forecast 0.9 percent to $4.51 a pound ($9,944 a ton). Copper averaged $7,558 a ton last year.

Rio Tinto joined Codelco and Freeport-McMoRan Copper & Gold Inc. this week in saying that China’s copper demand will continue to grow. A shortage this year may rise to between 400,000 tons and 500,000 tons, Andrew Harding, head of Rio Tinto’s copper business, said April 6.

Copper is Citigroup Inc.’s “most-favored” base metal, as mine supply lags behind demand on lower ore grades and ore depletion, the bank’s London-based analyst Jon Bergtheil said in Singapore on April 5. Researcher Brook Hunt is predicting a 570,000-ton shortfall this year, while Barclays Capital expects an 822,000-ton deficit.

Lead in London gained as much as 2.1 percent to $2,849.50 a ton, the highest price since April 2008, and aluminum increased as much as 0.9 percent to $2,697 a ton, the highest level since September 2008. Zinc rose as much as 2 percent to $2,502 a ton, the highest since March 4, and nickel climbed as much as 2.5 percent to $27,480 a ton.