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LONDON: Industrial metals prices were set to end 2021 with their biggest annual gain since 2009, driven by tight supply and increasing demand, with aluminium and tin the biggest risers.

Prices were mixed on Friday, with trading activity muted during the Christmas holiday season.

The London Metal Exchange (LME) index -- made up of copper, aluminium, nickel, zinc, lead and tin -- was up 32% this year after rising 20% in 2020.

"It's been a year with strong demand recovery from the pandemic," said ING analyst Wenyu Yao. "Most metals markets flipped into deficit."

"Looking into 2022, we expect it's a year of normalisation. We expect demand growth to moderate," she said, adding that limited supply should keep prices high, at least in the near term.

Aluminium climbs after smelters curtail output due to power prices

Prices: Benchmark copper on the LME was up 0.2% at $9,708 a tonne at 1124 GMT and up 25% in 2021, having risen 26% in 2020.

LME aluminium rose 0.1% to $2,819.50 a tonne on Friday and was up 43% in 2021, its biggest gain since 2009.

Zinc was down 0.1% at $3,528.50, but for the year was 28% higher, its biggest increase since 2017.

Nickel was up 1% at $20,790 on Friday and up 25% this year, the largest annual rise since 2019.

Lead slipped 0.4% to $2,289 a tonne but was up 15% in 2021, its biggest gain since 2017.

Tin was up 0.3% at $39,300 at 1124 GMT. For 2021, it was up 93%, the largest annual gain in at least two decades.

Rallies: Other commodities also surged in 2021 and global stock markets were on track for a third consecutive year of double-digit gains.

China: China's factory activity unexpectedly accelerated in December, but analysts see trouble ahead.

"China has been a primary source of demand for base metals since 2003, but we think this trend has started to come to an end," said Justin Smirk an economist at Westpac.

"With the decline of investment and production as key growth drivers, this will see diminishing incremental economic growth and a reduction in materials demand as a share of output," he said.

Peru: The Las Bambas copper mine in Peru said it would restart operations after reaching a deal with protesters blocking a road to the mine.

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