Base metals hit multi-month highs on Chinese data, weaker dollar

LONDON — Base metals prices rose in London on Wednesday, buoyed by industrial profit gains in top metals consumer China and a weaker dollar, while aluminum touched an eight-month high on technical buying and supply concerns.

As trade resumed after the Christmas break, three-month aluminum on the London Metal Exchange (LME) gained 2.9% to $2,394.50 a metric ton by 1701 GMT after hitting its highest since April 24 at $2,397.

Aluminum gained on the back of buying by Commodity Trade Advisor investment funds, which are largely driven by computer programs, one trader said.

Supply from Guinea, the world’s third-largest producer of alumina raw material bauxite, was also in focus after a Dec. 18 blast damaged fuel tanks at the main oil terminal handling fuel imports.

“Most bauxite mines will have diesel in stock, but those stocks will not go for ever,” said

Edgardo Gelsomino, aluminum assets research director at Wood Mackenzie.

“Affected mines will be able to adjust their logistics to bypass the damaged infrastructure, but this may increase their delivered costs of fuel.”

Guinea Alumina Corp. (GAC) offered the Guinea government the use of GAC’s fuel berth and bulk storage to help deal with the aftermath of the blast.

Aluminum rose despite daily LME data showing total stocks in LME-registered warehouses jumped to a four-month high of 523,725 tons after delivery of 15,950 tons.

The US dollar hit a five-month low on expectations that the US Federal Reserve could soon cut interest rates, making dollarpriced metals more attractive for buyers using other currencies.

With many market traders out for holidays volumes were likely to remain muted until the New Year.

LME copper rose 1.3% to $8,682 a ton after touching its highest since Aug. 1 of $8,715, while zinc was up 1.3% at $2,634.50 after hitting $2,649 for its highest since Nov. 15.

Tin 3.6% to $25,750 after touching its highest since Sept. 28 at $25,845 while lead advanced by 1.3% to $2,090.

Nickel added 2.4% at $16,900 a ton, with the market focused on a rally in top producer Indonesia, where workers are demanding improved work safety after a fatal accident. —