Copper rose to a record on Thursday and was on track to finish 2010 nearly one third higher as a weaker dollar and widening market deficit seen for next year burnished the metal's allure for investors. Benchmark copper on the London Metal Exchange closed at $9,490 a tonne, up from a close of $9,400 on Wednesday.
-- Copper stocks rise to highest since end-September
-- Zinc stockpiles reach new six-year peak over 700,000 T
The metal used in power and construction earlier hit a record $9,550 a tonne before paring gains after US data beat expectations. Copper has climbed almost thirty percent during 2010, up from $7,375 at the end of December 2009, with just one more day of LME trade on Friday before the new year.
"The economic data were uniformly well above expectations, still mixed, but definitely on the positive side in recent weeks, showing US economic improvement," said BNP Paribas analyst Stephen Briggs. The global market for refined copper stood in a 436,000 tonne deficit between January to September, an industry body said last week, while analysts more generally expect a widening deficit next year as emerging market demand eclipses output pinned back by a decline in giant mines.
Stockpiles of most metals have grown in LME-bonded warehouses during December as industry and trade destock to cut storage and insurance costs over the year end. Copper stockpiles rose by 5,050 tonnes, the latest data showed, and at 376,000 tonnes stand at the highest since late September. However, they have still fallen by one third from cycle highs of over 550,000 tonnes hit in February.
In other metals, zinc inventories popped above the 700,000 tonne mark to the highest levels in six years, amid lack of demand for the metal used by the steel galvanising sector. Inventories of nickel and tin are near the highest in six months, while lead inventories are not far from the highest in 10.5 years. In warrant holdings and cash contracts, a dominant copper position has fallen into the 50-80 percent bracket from the 80-90 percent bracket, the latest LME data showed.
Industrial metals markets have since the middle of November been watching the dominant position, the holder of which the LME has not identified. In prices, three-month aluminium finished at $2,454 a tonne, having closed at $2,455 on Wednesday. Lead and zinc hit new six-week highs, before paring the advances. Lead ended at $2,517, up from $2,531, while zinc was at $2,409 from $2,398 a tonne. Stainless steel material nickel wound up at $24,350, having finished on Wednesday at $23,845, while tin, used in electrical solder, was seen at $26,525 from $26,550.