Copper gains after data, lead hits 13-mnth high

3 September 2009

Copper gains after data, lead hits 13-mnth high

* Lead hits 13-month high on China smelter shut-downs
* European equities weak after U.S. macro data
* U.S. payrolls eyed by investors

Copper staged a late rally on Thursday, as investors digested demand prospects following a flood of economic data in the United States, while lead hit a 13-month high on Chinese smelter closure worries.

Volatile copper for three-months delivery on the London Metal Exchange closed at $6,255 a tonne from a close of $6,175 on Wednesday, when the metal hit a near two-week low of $6,025.
Lead ended at $2,280 a tonne from $2,111, having earlier soared to $2,290, its highest point since late July 2008.

Before the ISM numbers, data showed new applications for jobless benefits in the United States fell last week, while activity in the services sector was at its strongest in nearly a year in August.
Investors also took comfort from Shanghai equities, which jumped 4.6 percent after a top securities regulator pledged late on Wednesday to keep the market stable.

The pledge means China, the world's biggest copper consumer, is better poised to continue driving copper prices. Record copper imports by China have been key in driving copper above $6,000 a tonne from around $3,000 at the start of the year.

Copper has also been driven by speculative buying and signs of economic recovery. Although there is a risk of a price correction in September, analysts are cautiously bullish in the longer term. LEAD SMELTER SHUT-DOWNS

Analysts said worries were growing about lead supplies from China, where smelters were shut down last week following lead poisoning incidents."The prevention of heavy metal pollution should be put in a more urgent and more important position," Environment Minister Zhou Shengxian told a national pollution prevention meeting, Communist Party mouthpiece the People's Daily said.

Zinc closed at $1,893 from $1,828, while analysts said that the lead developments in China could also impact the metal, mainly used to galvanize steel.

Aluminium closed at $1,852 a tonne against $1,846. Latest LME data showed aluminium stocks fell 3,000 tonnes, but remained near a record 4.6 million tonnes.

Alcoa, the largest U.S. aluminium maker, said Chinese aluminium consumption would rise 8 percent in the second half from a year ago and cut its forecast drop in global demand for all 2009 to 5.5 percent from earlier forecasts of 7 percent.

Nickel ended at $18,200 from $18,100. Tin was at $14,450 from $13,950, having earlier hit $14,500, the highest in more than a week.

Metal Prices at 1610 GMT Metal Last Change Percent Move End 2008 Ytd Percent
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