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CENX: Aluminum and China

HUMEYRA PAMUK
Reuters
March 13, 2009 at 7:10 AM EDT

LONDON — Copper climbed around 3 per cent on Friday, with sentiment boosted by higher U.S. and European stock markets, while a fall in both London and Shanghai inventories underpinned prices.

Copper for three months delivery on the London Metal Exchange rose as high as $3,690 (U.S.) a tonne and was at $3,675 a tonne by 1016 GMT, versus Thursday's close of $3,580 a tonne.

“The main driver is stock markets,” analyst David Thurtell at Citi said. “The Dow Jones index was up very strongly and continued to rise after the FTSE closed. Metals have been taking quite a lead from equities for some months now.

“They will probably continue to do so, certainly today,” he added.

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LME aluminum rose $25 to $1,365 a tonne, as the market shrugged of a massive rise of almost 75,000 tonnes in inventories, bringing the total amount to 3.36 million tonnes.

Sentiment has also been lifted by a fall in China's aluminum stocks by about 500,000 tonnes from 1.1-1.2 million tonnes in early December and by an 16 per cent fall in Chinese output of the metal in the first two months of the year.

“In aluminum, China matters,” ANZ's senior commodities analyst Mark Pervan said. “The supply side is heavily skewed to China, where they have sunk a lot of money into the sector and are ready to come on when prices firm. Some 35 per cent of world aluminum production is in China so a big drop in production there will be positive.”

Zinc rose to $1,240.50 a tonne from a last quote of $1,222/1,225 a tonne on Thursday. Stocks of the metal, used to galvanize steel, fell by 2,850 tonnes.

Lead was at $1,255 from $1,237 while nickel gained to $9,650 from $9,500 while tin edged up to $10,450 a tonne versus $10,395.

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link:

http://www.theglobeandmail.com/servlet/story/RTGAM.20090313.wbasemetals0313/BNStory/energy/home