LONDON: Copper touched a one-week high on Tuesday and other base metals also gained on speculative buying fuelled by technical signals, optimism about a rebound in China's economy and a weaker dollar.
Zinc, however, extended its decline on worries about rising supply from Chinese smelters ramping up output.
"It seems that the macro picture in China has improved recently, and also the market seems to think that the dollar might come off a bit in the days ahead," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
Driving the upswing in prices were Commodity Trading Advisor funds, which mainly use technical signals such as momentum, while macroeconomic funds remained wary and on the sidelines, Torlizzi added.
"The market is still a bit tricky. Everybody's long, but things may change pretty quickly. It's too early to think a bull run has begun for the base metals."
Benchmark copper on the London Metal Exchange rose 0.2 percent in closing open-outcry trading to $6,487 a tonne after touching its highest since April 1 at $6,540.
* ZINC SMELTERS: LME zinc shed 1.6 percent to finish at $2,861 a tonne, its weakest since April 2. It was weighed down by fears that refined zinc supplies will surge after smelters and miners agreed to a sharp rise in treatment and refining charges.
"Current profits for the smelters are very high. This will push smelters to increase their utilisation rate," said Dina Yu, analyst at metals consultant CRU in Beijing, adding that Chinese smelters are earning record profits of as much as 3,000 yuan ($447) a tonne.
* ZINC STOCKS: On-warrant LME zinc inventories have gained 18 percent to 47,925 tonnes since touching record lows in late March, daily LME data showed on Tuesday.
* LEAD TECHNICALS: LME lead, which shed 0.8 percent to end at $1,975.50, is likely to register losses in the short term, said Commerzbank technical analyst Axel Rudolph.
"We will retain our immediately bearish forecast ... lead still has the August, December and January lows at $1,932.50/$1917.50 in its sights," he said in a note.
* DOLLAR: The dollar slipped for a second day against a basket of currencies, making dollar-denominated base metals cheaper for buyers with other currencies.
* STEEL/NICKEL: Nickel, mainly used in stainless steel, received a boost after Chinese steel rebar futures hit their highest since 2011 on increased demand from the construction sector. LME three-month nickel was bid up 0.3 percent in closing rings to $13,220 a tonne.
* PRICES: LME aluminium added 0.4 percent to close at $1,878 a tonne while tin advanced by 0.2 percent to $20,875.
Comments
Comments are closed for this article.