Zinc and lead were again the strongest performers on the London Metal Exchange Tuesday, hitting new all-time highs after inventory drawdowns boosted prices amid persistent problems with the LME's electronic trading platform.
LME three-month zinc rallied to a record $4,525 a metric ton, up 2.2% on the Monday PM kerb while lead hiked to $1,750/ton, up 2.4%.
Zinc stocks on the LME fell below the critical 100,000 tons Tuesday to 99,550 tons, down 1,800 tons on the day, highlighting the market's severe tightness.
Meantime, lead stocks were also down, falling by 925 tons to 47,050 tons while also drawing support from commodity trade advisory buying, traders said.
Traders said the lead market's upside remains intact, particularly given expectations of steady battery demand, mostly used in lead acid batteries for cars, during the colder winter months.
A generally more positive mood among investors toward commodities also also helped push up prices, analyst Michael Widmer at Calyon Financial said.
Problems with LME Select, the electronic trading platform, over the past 48 hours, have resulted in some reduction in trading volumes, traders said.
Select halted for the third time in two days Tuesday, with no timeframe given for trading to resume.
Some traders had said the new enhanced version of Select was introduced to enable the exchange to list its LME mini-contracts, due to be formally launched Nov. 20.
With no important economic data releases scheduled for Tuesday, some focus moved to the U.S. mid-term Congressional elections. The dollar weakened against the euro during the afternoon, with a strong showing for the Democrats possibly resulting in some more bearish overtones for the U.S. currency, some traders said.
Others contended that a poor result for the Republicans was already priced in.
LME copper trended higher during the day to rise to a one-week high of $7,500/ton but profit taking capped the move there.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb
Copper 7419.00-7420.00 Up 59.00
Lead 1739.00-1740.00 Up 32.00
Zinc 4500.00-4510.00 Up 75.00
Aluminium 2791.00-2792.00 Dn 4.00
Nickel 31200.00-31250.00 Up 150.00
Tin 10125.00-10150.00 Up 50.00
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