Zinc and copper prices rose on Tuesday as ongoing strikes in Canada and Chile added to supply worries while a weaker dollar also supported the market ahead of a speech by US President Donald Trump. Benchmark zinc on the London Metal Exchange climbed 0.7 percent to close at $2,825 a tonne while copper also ended 0.7 percent higher at $5,973.
"Zinc and copper are pretty well supported by supply problems," said Robin Bhar, head of metals research at Societe Generale. Strikes continued at Noranda Income Fund's zinc processing plant in Quebec, the second-largest in North America, and at Escondida in Chile, the world's biggest copper mine. Output also remained halted at giant copper mine Grasberg in Indonesia due to a contract dispute with the government.
LME prices had a fillip from a weaker dollar index as traders took profits on the US currency ahead of Trump's speech at a joint session of US Congress due at 9 pm (0200 GMT Wednesday). "Now what we need to see is some real concrete plans from Trump. He's promised a lot but hasn't said very much recently on tax cuts and his grandiose infrastructure plans," Bhar said.
Aluminium gained 1.3 percent to close at $1,924, the highest since May 2015. Deutsche Bank raised its aluminium price forecasts for this year and next by an average of 7.5 percent, it said in a note, though it warned of near-term downside. "Chinese 'supply side reforms' or 'de-capacity' and a much more stringent focus on environmental standards could hold the key to a much healthier market," analyst Grant Sporre said.
Nickel, the only LME metal in the red, fell 0.6 percent to finish at $10,980. "We believe that we are at a critical turning point in fundamentals, which will weigh on nickel prices. First, the latest fundamental data shows the nickel market softening into year-end due to a sharp upswing in Indonesia's output," said Nicholas Snowdon, an analyst at Standard Chartered in London. Lead rose 0.1 percent to close at $2,257 and tin gained 1.4 percent to $19,225.
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