Aluminium prices hit their highest level in more than 10 years on Thursday as inventories fell and expectations rose that supply may fall short of demand next year owning to lower Chinese aluminium exports.
Three-month aluminium hit $2,019 a tonne on the London Metal Exchange, the highest since February 1995, when it reached $2,155. The metal price drifted off its peak to close at $2,013 at the end of open outcry trade, up $13 on the day.
“There’s still a lot of money coming into commodity markets from investment funds. Institutional funds are still bullish,” said Andrew Silver, base metals trader at Natexis Metals.
Aluminium’s rise initially supported copper, which peaked at $3,973 a tonne before slipping to $3,940, a fall of $7 on the day.
“The increase in aluminium prices has been less than in other base metals so the market still sees potential in aluminium. It expects it to stay above the $2,000 level, rather than wanting to invest in copper at over $4,000,” said Neil Buxton, analyst at GFMS Metals Consulting.
The three-month LME zinc price reached a new eight-year high of $1,569.5 a tonne, its highest level since July 1997, when it hit $1,675 a tonne. At the end of trading in London, zinc was at $1,549.5, up $4.50 on the day.
Metal prices are forecast to stay at historically high levels for some time, supported by strong global demand, especially from Asia, according to a Reuters analyst poll.
Crude oil and heating oil soared from three-month lows on signs that US fuel demand is recovering as retail prices fall. IPE Brent for December delivery was up $2.17 at $60.52 at the close of London trading.
The December West Texas Intermediate contract rose $2.03 to $61.78 by the end of the action on the New York Mercantile Exchange as traders digested the latest weekly data on US oil supply and demand trends.
Oil prices were pushed up by fears of production disruptions at Royal Dutch Shell and Exxon Mobil facilities in the Netherlands.
Natural gas futures rose after a US report showed stockpiles rose by a smaller-than-forecast 29bn cubic feet last week to 3,168bn cubic feet. December Nymex natural gas futures were up 3.6 cents at $11.650 per million British thermal units.
Carbon dioxide emission allowance prices for 2005 fell to their lowest level in three months, with energy demand in Europe suffering from above-normal temperatures. Carbon emission allowances dipped to a low of €20.85 but recovered to €21.35 in late London trade.
Gold declined under $460 to $458.90/459.70, down $3.80 from its late quote of $462.70/463.50 in New York on Wednesday.
