Trade event adds polish to base metals

Base metals moved higher yesterday, lifted by positive sentiment emanating from London Metal Exchange week, the main annual event for the industry. Mining executives and base metals traders are, in general, more confident than a few weeks ago, based on the belief that strong Chinese economic growth will offset weakness in developed countries. Yesterday's upward price movement was, however, amplified by low trading volumes as traders recovered from Tuesday's parties. Kevin Norrish, of Barclays Capital, said that there was a growing consensus that many of the trends that had supported the big price gains in metals of the past few years were unlikely to fade. "Future demand growth rates are likely to be higher, mining conditions more difficult and costs much higher," he said. Lead hit a fresh high on strong demand from battery manufactures, tight supplies after the closing of a mine in Australia and extremely low global inventories. Lead stocks at LME's warehouses are equivalent to just half a day of global demand. Lead surged to $3,885 a tonne but later slipped to trade 0.2 per cent lower at $3,825 a tonne. Copper , the base metals bellwether, consolidated above the $8,000-a-tonne level on fresh buying and favourable comments from Codelco, the world's largest copper producer. The red metal hit an intraday high of $8,225 a tonne and later traded 2.6 per cent higher at $8,175 a tonne. Aluminium moved 1.8 per cent higher to $2,470 a tonne. Zinc was 2.4 per cent higher at $3,064 a tonne, while nickel rose 1.9 per cent to $31,500 a tonne. Tin moved 0.6 per cent higher to $15,950 a tonne.