Zinc and aluminium prices hit their highest in more than a year as investors sought exposure to commodities with improved fundamentals, but gains in copper were held back by worries over China's property sector and over a build-up of stocks.
Investors are slowly being drawn back into commodities, attracted by stronger global economic growth and more volatility within sub-sectors, typified by current investment flows out of grains into industrial metals.
"Investors are looking for commodities that have a good story behind them, especially those perceived to have improving fundamentals like zinc and aluminium, but copper is an outlier," said Nic Brown, head of commodities research at Natixis.
Three month aluminiumon the London Metal Exchange was untraded in official midday rings but last bid up 1.26 percent to $2,006 a tonne, having hit a 16 month peak of $2,015 a tonne earlier, while zinc traded up 0.83 percent in rings to $2,312 a tonne, having hit a near three year high earlier of $2,345 a tonne.
Helping aluminium, LME stocks fell to 4.947 million tonnes, their lowest point since September 2012. Also, cash aluminium traded at a discount of just $16.50 a tonne to the three month price , its narrowest since September 2012.
Daily average primary aluminium output excluding China fell to 67,000 tonnes in June, from 67,500 tonnes in May, data from the International Aluminium Institute (IAI) showed on Monday.
Zinc meanwhile continued to gain from falling production rates at large mines such as Century in Australia, with little in the way of giant new projects on the horizon. Also LME stocksare at their lowest since December 2010.
By contrast, the case to sell copper going forward is compelling.
Shanghai copper stocks rose 28.9 percent last week, LME stocks have risen since late June, while Comex copper stocks have climbed to eight-month peaks.
"We are negative on copper. Our current forecasts anticipate copper surpluses of 225,000 tonnes in 2014, followed by 285,000 tonnes in 2015," said Brown.
Coppertraded at $6,989 a tonne in official midday rings, up 0.06 percent from Friday's close but not far off this month's 3-week low of $6,960 a tonne.
China's imports of refined copper stood at 255,041 tonnes in June, down 8.16 percent from a year ago, data out earlier showed. China consumes some 40 percent of the world's copper.
Also a concern, some of the wealthiest Chinese are paring their property investments and turning to private equity or overseas holiday homes, a sign of fading hopes that the once red-hot market can bounce back any time soon.
Elsewhere, COMEX copper speculators boosted net 'long' or buy positions to their highest since at least 2006 in the week to July 15, according to the Commodity Futures Trading Commission and Reuters data
"There is also likely to have been profit-taking (in copper) on the part of speculative financial investors after they had increased their net long positions considerably for the fourth straight week," said Commerzbank in a note.
In other metals, leadwas last bid up 0.23 percent in rings at $2,192 a tonne, tin was last bid flat at $22,100 a tonne while nickel traded up 1.15 percent in rings at $18,875 a tonne.
Source: Reuters
Investors are slowly being drawn back into commodities, attracted by stronger global economic growth and more volatility within sub-sectors, typified by current investment flows out of grains into industrial metals.
"Investors are looking for commodities that have a good story behind them, especially those perceived to have improving fundamentals like zinc and aluminium, but copper is an outlier," said Nic Brown, head of commodities research at Natixis.
Three month aluminium
Helping aluminium, LME stocks fell to 4.947 million tonnes, their lowest point since September 2012
Daily average primary aluminium output excluding China fell to 67,000 tonnes in June, from 67,500 tonnes in May, data from the International Aluminium Institute (IAI) showed on Monday.
Zinc meanwhile continued to gain from falling production rates at large mines such as Century in Australia, with little in the way of giant new projects on the horizon. Also LME stocks
By contrast, the case to sell copper going forward is compelling.
Shanghai copper stocks rose 28.9 percent last week, LME stocks have risen since late June, while Comex copper stocks have climbed to eight-month peaks.
"We are negative on copper. Our current forecasts anticipate copper surpluses of 225,000 tonnes in 2014, followed by 285,000 tonnes in 2015," said Brown.
Copper
China's imports of refined copper stood at 255,041 tonnes in June, down 8.16 percent from a year ago, data out earlier showed. China consumes some 40 percent of the world's copper.
Also a concern, some of the wealthiest Chinese are paring their property investments and turning to private equity or overseas holiday homes, a sign of fading hopes that the once red-hot market can bounce back any time soon.
Elsewhere, COMEX copper speculators boosted net 'long' or buy positions to their highest since at least 2006 in the week to July 15, according to the Commodity Futures Trading Commission and Reuters data
"There is also likely to have been profit-taking (in copper) on the part of speculative financial investors after they had increased their net long positions considerably for the fourth straight week," said Commerzbank in a note.
In other metals, lead
Source: Reuters
