- Copper eases but set weekly gain on stimulus hopes
- Expectations of shortages fuel zinc to one-year high
(Adds details, quotes; changes dateline from SINGAPORE)
Aluminium and nickel touched the highest in nearly two months on Friday on worries about supply shortages while the wider metals market got support from a weaker dollar and hopes for more stimulus in China.
Three month aluminium CMAL3 on the London Metal Exchange had climbed 0.7 percent to $1,661 a tonne by 1021 GMT, the strongest since May 3.
Aluminium has been bolstered as industrial firms in China increasingly buy it in liquid form, creating a shortage of ingots, the form of the metal which drives prices.
The shortage was highlighted on Friday when weekly data showed inventories on the Shanghai Futures Exchange (ShFE) slid 11.5 percent to 163,664 tonnes.
That means that ShFE inventories have tumbled by more than half from 341,615 tonnes in mid-March.
"The ingot market is tightening up and you're seeing some pretty hefty draws from Shanghai inventories. The market is priced on ingot not liquid metal," said analyst David Wilson at Citi in London.
The most traded ShFE aluminium contract SAFcv1 closed 2.4 percent higher at 12,760 yuan a tonne.
LME benchmark nickel CMNI3 rose 1.3 percent to $9,570 a tonne, also the highest since May 3, on concern about developments in Philippines, the biggest supplier of nickel ore to China.
The new mining minister, a committed environmentalist, announced plans on Friday to review all mines operating in the country.
Metals won support from a softer dollar index <.DXY>, which makes commodities priced in it cheaper for buyers using other currencies.
"We had Brexit and there is market expectations of interest rates to remain low," said Alan Liew at United Overseas Bank in Singapore. "It is good for commodities."
Zinc CMZN3 rose 0.6 percent to $2,119.50, a fresh 1-year peak, rising for a fourth straight session as funds continue to pile into the market.
Expectations of potential shortages have fuelled buying in zinc but an inventory overhang means the metal is readily available for consumers.
Total world stocks of zinc at the end of April stood at about 1.5 million tonnes, according to the International Lead and Zinc Study Group. Analysts estimate demand for global zinc this year to be around 14 million tonnes.
Copper CMCU3, however, was the only LME metal in the red, falling 1.2 percent to $4,785 after data showed ShFE inventories rose for the first time in nearly two months.
PRICES
Three month LME copper CMCU3 Most active ShFE copper SCFcv1 Three month LME aluminium CMAL3 Most active ShFE aluminium SAFcv1 Three month LME zinc CMZN3 Most active ShFE zinc SZNcv1 Three month LME lead CMPB3 Most active ShFE lead SPBcv1 Three month LME nickel CMNI3 Most active ShFE nickel SNIcv1 Three month LME tin CMSN3 Most active ShFE tin SSNcv1 (Additioanl reporting by Naveen Thukral in Singapore, editingby William Hardy) (([email protected]; +44 20 7542 7093; Reuters Messaging: [email protected]))
Keyword GLOBAL METALS/ (UPDATE 3)
