The U.S. dollar remaining on the defensive lifted London Metal Exchange prices Tuesday, gainging technical momentum to rise to fresh highs in illiquid volume, traders said.
Tuesday's performance was seen as constructive for the short term that saw LME three-month lead rising to a new record high, aluminium at a five-month high and nickel edging to an all-time high in post-kerb trade.
The recent bearish performance of the dollar remains at the forefront of traders' considerations, underpinning the downside. At 1804 GMT, the U.S. currency traded at $1.3326 against the euro after an earlier low of $1.3364.
The approaching year end and falling levels of liquidity also increased the likelihood of volatile price moves, traders said.
Technical tightness in aluminium, the key driver behind the metal's rise to a five-month high of $2,852 a metric ton – up 1.4% on the Monday PM kerb – will ease following Wednesday's options declaration, traders said.
"Aluminium is running out of time for real fireworks," one analyst said, referring to the $3,000/ton target.
LME copper rose as much as 3.4% on the day after hitting buy stops on the 30-day moving average, triggering technically based buying, Roy Carson at Triland said.
LME nickel was firm throughout the day, rising level with last week's $33,400/ton record high and moving to a new peak of $33,450/ton in post-kerb trade.
Fundamental factors, including strikes, project delays and a strong stainless steel market will keep nickel strong going forward, analysts said.
Supply concerns remain a key worry for the market despite views of a slowing global economic growth outlook and bearish economic from the U.S. that will eventually dampen raw material consumption going forward.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Monday PM kerb
Copper 7175.00-7180.00 Up 175.00
Lead 1730.00-1732.00 Dn 9.00
Zinc 4500.00-4505.00 Up 5.00
Aluminium 2840.00-2841.00 Up 29.00
Nickel 34300.00-34305.00 Up 600.00
Tin 10625.00-10650.00 Dn 25.00
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