METALS-Copper surges to 4-1/2 month high after Fed stimulus
* Fed stimulus plan propels copper, metals to multi-month highs * Copper up over 10 pct over past two weeks * Commodities in next leg of super-cycle - analyst * Coming up: U.S. Empire States Manufacturing Index Monday By Chris Kelly and Harpreet Bhal NEW YORK/LONDON, Sept 14 (Reuters) - Copper rallied Friday to its highest level in 4-1/2 months on the prospects of a demand boost from a new round of monetary stimulus from the Federal Reserve to boost the world's largest economy. Gains spanned the base metals complex, with markets from aluminum to zinc all scaling multi-month peaks alongside a rise in risk appetite across financial markets after the Fed said on Thursday it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market. The Fed's aggressive plan enhanced what was an already upbeat mood in financial markets since the European Central Bank (ECB) announced plans to cut the borrowing costs of struggling euro zone members. "It's the concerted effort between the ECB and the Fed ... more accommodation means more money floating out there in these various economies to try and get them jump-started," said Michael K. Smith, president of T & K Futures and Options Inc. in Port St. Lucie, Florida. COMEX copper for December delivery shot up by 12.25 cents or 3.3 percent to settle at $3.8325 per lb, just shy of its intra-day peak at $3.8380, which marked its priciest level since May 1. The day's low was $3.73. COMEX volumes rose above 57,000 lots in late New York trade, nearly a third above the 30-day norm, according to preliminary Thomson Reuters data. At the London Metal Exchange (LME), three-month copper peaked at $8,411 a tonne, another high dating back to early May. It closed up $305 at $8,380. "It's clear that the markets have taken a very positive view on the Fed's action last night, and we have seen a strong move up today in markets," said Ross Strachan, economist at Capital Economics. Copper prices rose over 5 percent this week, bringing its gains over the past two weeks to more than 10 percent -- the biggest two-week rise since November last year. Even so, some traders and analysts doubted if the rally could be sustained for long as downstream copper demand in China remained sluggish. Still, others believed the recent actions by the ECB and the Fed, as well as China's approval of a $157 billion infrastructure plan could set the stage for the next leg higher. "What has happened is hugely bullish ... this is the next leg of this commodity super-cycle," said T & K Futures' Smith. He expected copper prices to pull back early next week in consolidation from the recent rally, but then push higher on follow-through buying. "If it pulls back 15 to 20 cents next week, people are going to jump on it." EURO ZONE The spotlight turned again on the euro zone, as finance ministers will discuss on Friday if Spain should ask for financial support after the ECB's new bond-buying program brought Madrid's borrowing costs lower. "We have seen markets take a relatively positive view on recent developments in the euro zone," Strachan said. "But as we have seen in the past ... the initial optimism has often dissipated very quickly and markets have slipped back as the reality of the underlying weakness in those economies comes to the fore." In other metals, LME aluminum rose $93 to finish at $2,195 a tonne, after touching its highest since late March at $2,199. In China, aluminum profile manufacturers in Guangdong have reported a rise in orders this month, after a decline in order books in the past 3-4 months. Analysts and industry sources see this as a sign of recovering demand. Tin rallied $1,325 to end at $21,675 a tonne, its highest since early May. Indonesia's biggest tin miner PT Timah forecast production would be at least 38,000 tonnes this year, an official at the state-owned firm said on Friday, little-changed from the previous year. Metal Prices at 1805 GMT Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 382.75 11.75 +3.17 343.60 11.39 LME Alum 2200.00 98.00 +4.66 2020.00 8.91 LME Cu 8380.00 305.00 +3.78 7600.00 10.26 LME Lead 2264.00 106.50 +4.94 2035.00 11.25 LME Nickel 17775.00 1025.00 +6.12 18710.00 -5.00 LME Tin 21675.00 1325.00 +6.51 19200.00 12.89 LME Zinc 2116.00 80.00 +3.93 1845.00 14.69 SHFE Alu 15835.00 175.00 +1.12 15845.00 -0.06 SHFE Cu* 60470.00 2220.00 +3.81 55360.00 9.23 SHFE Zin 15760.00 485.00 +3.18 14795.00 6.52 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
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