Tin, lead end higher on LME

Copper and aluminium took a back seat on the London Metal Exchange Thursday as tin, lead and nickel spiked to record and multi-month highs.

LME lead set a new record of $1,505 a metric ton, up 3.4% on the Wednesday PM kerb after a string of stock drawdowns saw LME inventories plummet to 47,350 tons.

"Lead's fundamentals are strong. Availability particularly in Europe is tight, resulting in stock drawdowns. Production cuts at European refineries have removed around 50,000 tons from the lead market," Calyon Financial analyst Michael Widmer said.

Speculative buying extended the rally, which is set to run up further, analysts said.

LME nickel also reached a new record, edging to $30,600/ton, up $500. A large stock draw down of 966 tons to 4,986 tons triggered initial profit-taking with prices dropping to $28,875/ton, but the drop initiated fresh demand, hitting buy stops, Triland Metals Ltd. said in a report.

Elsewhere LME tin prices hiked to a five-month high of $9,525/ton, up 4.7% on news reports that a number of small smelters in Indonesia have shut after a recent police crackdown on three operations which did not have mining licenses.

LME copper and aluminium vacillated within recent ranges in sluggish trade despite generally upbeat sentiment at the tail end of this year's LME week. Volumes remained thin throughout the session, traders said.

While sentiment among LME week participants remained short-term bullish, the outlook for the base metals into 2007 remains less clear.

Whether or not investment funds will remain positive towards commodities will have a significant impact on future base metals' price direction, analysts said.

"Hedge funds and other institutional players have liquidated positions on the LME and in some cases have gone short amid their perceptions of a deteriorating macroeconomic picture which they feel will be less friendly towards base metals," said Robin Bhar of UBS.

3 months metal (prices in dollars a ton)
Bid – Ask, Change from Wednesday PM kerb

Copper 7480.00-7485.00 Dn 30.00
Lead 1492.00-1495.00 Up 34.00
Zinc 3760.00-3761.00 Dn 30.00
Aluminium 2590.00-2595.00 Dn 15.00
Nickel 30500.00-30505.00 Up 400.00
Tin 9425.00-9475.00 Up 375.00