Base metals closed mostly higher on the London Metal Exchange Friday, with industry bellwether copper lifted 1.7 per cent by a strong euro and heavy short covering, market participants say.
LME three-month copper ended the PM kerb at $US8,530.50 a metric ton, up $US140.50 on the previous close and well off an earlier low of $US8,330/ton.
Metal prices were lifted as the euro rose to its highest level against the dollar since December, rallying after Greek cabinet members approved the details of a debt restructuring. The metals are priced in US dollars, and as such a stronger euro makes them cheaper for buyers using the single currency.
Following rather subdued trade early in the session, and a range-bound day Thursday, a flurry of activity sent copper above the closely-watched $US8,500/ton level mid-afternoon in Europe.
Traders attributed the move to the covering of a large short position, originally booked around $US7,000/ton in mid-2011. Speculative players were also seen breathing life into the previously lackluster market, brokers said.
Aluminum outperformed heading into the kerb close and finished the session up 2.4 per cent at $US2,327/ton. Credit Suisse said in a note that aluminum prices are showing "considerable stickiness" near certain levels.
"We have now had a month of essentially sideways price action near the $2,200/ton-$2,250/ton region [and] although aluminium is on the whole the least volatile LME metal, movements among these levels tend to be very rapid, easily moving $100-$200 a ton within a few days," the bank said.
It says that while it expects the market to eventually break to the upside, shooting toward $US2,400/ton following a rash of production closures, the direction of moves in the near-term remain uncertain and "can be exceptionally difficult to catch in progress."
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Thursday PM kerb
Copper 8530.5-8531.0 Up 140.5
Lead 2208.0-2209.0 Up 43.5
Zinc 2079.0-2080.0 Up 31
Aluminum 2327.0-2328.0 Up 54
Nickel 20175.0-20180.0 Up 200
Tin 23850.0-23855.0 Dn 340
Aluminum Alloy 2220.0-2240.0 Up 25
Aluminum Alloy-NASAAC 2320.0-2330.0 Up 40
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