* Zinc hits highest since September 2011
* Aluminium climbs to 10-month high
* U.S. job growth higher than expected, jobless rate falls
(Updates with closing prices)
By Harpreet Bhal and Eric Onstad
KUALA LUMPUR/LONDON, July 3 Nickel surged to a
six-week peak on Thursday and copper prices touched their
highest levels in more than four months on fund buying after
strong U.S. jobs data boosted hopes that economic recovery
would spur demand for industrial metals.
Aluminium climbed to the strongest level in more than 10
months and zinc hit its highest level in nearly three years
Three month nickel was the strongest performer on
the London Metal Exchange (LME), climbing 1.3 percent to close
at $19,870 a tonne after touching a session peak of $19,990, the
strongest since May 20.
Nickel has been the star performer on the LME this year,
with gains of more than 40 percent after top producer Indonesia
imposed a ban on exports of unprocessed ore.
Nickel raced to a high of $21,625 in May, but has since
struggled to regain those levels as investors realised that no
shortages had yet emerged due to high levels of stocks.
"Although the medium-term outlook for nickel is certainly
very favourable, we are still waiting for tangible signs of
scarcity, or at the very least diminishing stocks," analyst
Grant Sporre at Deutsche Bank said in a note.
"We think the market is going to be prone to bouts of
profit-taking with periods of short-term exuberance with prices
moving well ahead of the fundamentals."
The price was also being supported ahead of next week's
presidential election in Indonesia, where a new government is
expected to reaffirm the ore export ban.
U.S. JOBS DATA LIFTS METALS
Most of the LME metals complex, including copper, saw fund
buying in the wake of healthy economic data from the United
Employment growth jumped in June while the jobless rate
closed in on a six-year low, showing the U.S. economy was
rebounding after a slump at the start of the year.
That added to optimism spurred by data this week showing an
upbeat outlook for global manufacturing, especially in China.
After the U.S. jobs data LME copper surged to a
session high of $7,187.50 a tonne, the highest since Feb. 19,
before paring gains to close at $7,175, up 0.7 percent.
"The growth story is well intact...and this is going to
increase the demand in the longer term for copper and aluminium
as more construction projects will get the green light," said
Naeem Aslam, chief market analyst at Ava Trade.
Investors should be cautious, however, warned analyst
Dominic Schnider of UBS Wealth Management in Singapore.
"People were saying, 'What is cheap in the world?' They
figured out the metals were cheap and if things accelerated a
little bit, why not take a position?" he said.
"We have been telling our clients to look for 5-10 percent
gains and then pull the plug. You can't get greedy with more
than double digits. It is not a trending market."
Benchmark zinc hit an intraday high of $2,270.25 a
tonne, its highest level since Sept. 2011, before giving up
gains and going in the red, ending down 0.4 percent at $2,239.
Zinc, used for galvanising steel, has risen about 9 percent
so far this year, lifted by expectations that mine closures and
declining ore grades would lead to shortages in the market.
Aluminium hit a high of $1,938.50 a tonne, the
strongest since Aug. 19, 2013, before trimming gains to finish
at $1,936, a rise of 0.67 percent.
Tin shed 0.5 percent to close at $22,900 a tonne and
lead also fell 0.5 percent to end at $2,196.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Additional reporting by Melanie Burton in Sydney; Editing by
William Hardy and Keiron Henderson)