Robust demand and low inventories helped pushed zinc to an all-time high at the London Metals Exchange, while a weaker U.S. currency gave support to the base metals complex Tuesday, analysts said, after the LME three-month zinc price reached a record high of $4,300 per metric ton.
The weaker U.S. dollar supported zinc as well as other metal prices Tuesday, said Bhar. The U.S. dollar fell Tuesday after the release of weaker-than-expected Chicago PMI data and consumer confidence survey.
From a technical perspective, zinc prices held an upside target of $4,600 or $4,700/ton after consolidating for much of the summer, said William Adams of BaseMetals.
Analysts pointed to falling LME warehouse stocks which dropped 1,325 tons to 107,625 tons Tuesday morning.
Meanwhile, LME three-month copper traded within Monday's price range, hitting a high of $7,450/ton but later falling to below the 10-day moving average of $7,443.50/ton.
"Copper remains in the doldrums and exhibits zero interest in joining the other metals," said Adams. Copper's inability to rally is driven in part by substitution, consumer de-stocking and fund profit-taking, all of which are reflected in the pick-up in stocks, said Adams.
LME copper warehouse stocks increased by 1,025 tons to 130,500 tons Tuesday morning.
Three-month nickel traded within its recent range hitting a high of $31,650/ton earlier Tuesday before retreating to $31,350/ton.
Although three-month aluminium prices gave back earlier gains, the metal is still trading near the high end of its recent range. In the medium-term, aluminium prices are likely to trade towards the $3,000/ton price level due to the strong amount of December call interest at that level, said John Kemp of Sempra earlier.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb
Copper 7375.00-7380.00 Up 10.00
Lead 1615.00-1617.00 Up 23.00
Zinc 4220.00-4221.00 Up 60.00
Aluminium 2789.50-2790.00 Dn 18.50
Nickel 31300.00-31350.00 Up 700.00
Tin 10250.00-10300.00 Up 200.00
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