LONDON: Copper prices surged to their highest in 29 months on Friday as speculators extended a buying spree on continued strong demand in top consumer China and potential supply disruptions. Aluminium, zinc and lead also hit multi-month peaks, fuelled by speculative funds that largely use automated trading based on technical signals such as momentum, traders and analysts said.
Benchmark copper on the London Metal Exchange (LME) had gained 2.5% to $7,266.50 a tonne by 1705 GMT, its highest since June 2018.
"Fundamentals haven't changed a lot recently. We know that Chinese demand is strong and supply is constrained in some parts of the world," said Julius Baer analyst Carsten Menke.
The metal, widely used in power and construction, has rallied 66% since March. The premium for cash LME tin over the three-month contract rose to $50 a tonne, its highest since late July and up from $9.50 two weeks ago, indicating tighter supplies in the LME warehouse system.
LME aluminium stocks fell to 1.4 million tonnes, the lowest since May 13, having shed 6% over the past month, LME data showed on Friday. LME aluminium prices slipped 0.2% to $1,988 a tonne after touching a two-year peak of $2,003.50, while Shanghai Futures Exchange aluminium rose to 16,000 yuan a tonne in night trading, the highest since November 2017.
LME zinc, supported by a shutdown of the Gamsberg mine in South Africa, advanced 1.3% to an 18-month high of $2,795 a tonne. Lead climbed 2.5% to $2,027.50, the strongest since Jan. 17, nickel jumped 2% to $16,145 and tin rose 0.1% to $18,740.
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