Aluminium closes at four-month high on LME

Speculative buying pushed LME aluminium to a four-month high Wednesday, while prices elsewhere ended mixed after two days of erratic trade, market participants said.

LME three-month aluminium rose to $2,730 a metric ton, up 2.1% on the Tuesday PM kerb to the highest level since the beginning of June.

"Consumers have been active on the dips and the market looks like it wants to go higher but there was some selling capping the move above $2,700/ton," a trader said.

In the copper market, the International Copper Study Group released supply and consumption data for the first seven months of 2006, indicating an apparent production surplus of about 10,000 tons and, when seasonally adjusted, a surplus of 157,000 tons.

However, this data doesn't take into account non-reported stock changes, with the Chinese State Reserve Bureau destocking around 200,000 tons so far this year, according to traders.

Meantime, Rio Tinto's third quarter copper output fell 6% to 182,800 tons.

Copper meandered in quiet trade between $7,600-$7,730/ton to finish almost unchanged on the day, eyeing U.S. data on housing starts, which unexpectedly climbed by 5.9% to 1.772 million on an annual basis. Analysts' consensus outlined a 1.2% decline to 1.645 million.

"I thought the housing data was positive short-term but less so longer-term," a trader said.

U.S. housing data is a key indicator for U.S. economic growth and metal consumption.

A rise in LME nickel stocks by 414 tons to 5,310 tons, and a fall in cancelled warrants to 29.94% from 31.37%, precipitated selling pressure for nickel. Once prices crossed the $31,000/ton line, stops were triggered and nickel retreated to $30,350/ton, down 3.2%, traders said.

LME tin prices lost further on profit taking and producer hedging after the sharp losses seen Tuesday, Triland Metals Ltd. said in a report.

Prices fell to an intraday low of $9,500/ton, down 4.7%, giving up all gains seen during the past three days.

LME stock inflows and easing concerns for Bolivia's tin production capped advances in the afternoon, traders said.

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

Copper 7645.00-7650.00 Up 6.00
Lead 1493.00-1495.00 Dn 2.00
Zinc 3881.00-3882.00 Up 16.00
Aluminium n/a -2714.00 n/a
Nickel 30900.00-30950.00 Dn 450.00
Tin 9700.00-9725.00 Dn 275.00