May 18, 2011 / 5:46 PM / 7 years ago

METALS-Copper ends up sharply in broader commods recovery

 * Copper up with broader commodity recovery
 * LME aluminium stocks climb to fresh record high
 * Coming up: U.S. weekly jobless claims data Thursday
 (Recasts, adds New York dateline/byline, updates with New York
closing copper price and analyst comments)
 By Chris Kelly and Pratima Desai
 NEW YORK/LONDON, May 18 (Reuters) - Copper closed sharply higher
on Wednesday, posting its biggest one-day advance in two months, as
commodity markets stabilized from recent losses and presented
investors with truer valuations.
 Gains ran far and wide across the commodity complex, led by an
almost 4-percent rally in U.S. crude oil prices, a two-week high in
grain futures in Chicago, and a gold price back up near $1,500 an
 The 19-commodity Reuters-Jefferies CRB index .CRB, a global
benchmark for the asset class, was up about 2.2 percent in late New
York trade, on track for its biggest one-day gain in two months.
 "I think everyone has kind of sobered up from the last two weeks.
Everything is still there on the inflation side of it, and on the
fundamental side of it, these markets should never had gotten
punished in the first place," said Sean McGillivray, vice president
and head of asset allocation for Great Pacific Wealth Management in
 "People are easing back into the market. With the exception of
silver, I think commodities are back into finding their true value."
 London Metal Exchange (LME) benchmark copper CMCU3 shot up $262
to end at $9,061 a tonne in its biggest daily gain since March 17.
Earlier, it touched $9,075 a tonne, its loftiest level since May 5.
 Other base metals rose in tandem, with zinc CMZN3 and lead
CMPB3 each up about 5 percent on the day, with the latter also
touching its highest in two weeks.
 In New York, the July COMEX contract HGN1 jumped 10.65 cents,
or 2.7 percent, to settle at $4.1050 per lb, near the upper end of
its $4.0230 to $4.1155 session range.
 Last week, copper prices in London and New York crumbled to their
lowest levels since last December, at $8,504 a tonne and $3.8535 per
lb, respectively.
 "Generally sentiment has improved ... and generally more stable
equity markets, and the feeling maybe that what we went through in
the last few weeks was simply overdone," Credit Agricole analyst
Robin Bhar said.
 A stronger dollar and renewed concerns about global economic
growth from China's monetary tightening campaign, weak U.S. data, and
Europe's ongoing debt crisis were behind crashing commodity prices in
the first two weeks of May.
 China is the world's largest consumer of industrial metals,
accounting for nearly 40 percent of global demand estimated at around
21 million tonnes this year. The second largest consumer is the
United States.
 Weighing on copper are rising inventories, which in LME
warehouses have surged about 35 percent to 467,800 tonnes since
December 9. <0#LME-STOCKS>
 "The base metals will continue to face headwinds from lacklustre
demand in China and Japan, but a short-term rebound in prices seems
likely in the weeks ahead," Standard Chartered said in a note.
 "Aluminium is now struggling under the weight of heavy stock
inflows to the LME, which is depressing prices."
 LME stocks of aluminium rose 1,325 tonnes to hit a record high of
4.71 million tonnes.
 Cash aluminium to the three-month contract MAL0-3 is now in an
$11 a tonne contango, or discount, that could discourage deliveries
to LME warehouses. [ID:nLDE74F0PY] [ID:nLDE74F0SB]
 Aluminium CMAL3 closed at $2,556 a tonne from $2,501 at the
close on Tuesday.
 Aluminium prices are up more than 30 percent since last June,
partly because of expectations of stronger demand and partly because
of bank financing deals which have tied up about 70 percent of LME
stocks. [ID:nLDE73C242]
 Zinc closed up $97 at $2,188 a tonne and lead jumped $136 to end
at $2,445 -- its highest since May 5.
 The global lead market was in surplus by 24,000 tonnes in the
first quarter, latest monthly bulletin from the International Lead
and Zinc Study Group showed. Zinc was in surplus of 111,000 tonnes in
the same period. [ID:nLDE74H0QL] [ID:nLDE74H0PI]
 Metal Prices at 1725 GMT
 COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
 Metal            Last      Change  Pct Move   End 2010   Ytd Pct
 COMEX Cu       411.10       11.25     +2.81     444.70     -7.56
 LME Alum      2556.00       55.00     +2.20    2470.00      3.48
 LME Cu        9064.00      265.00     +3.01    9600.00     -5.58
 LME Lead      2444.00      135.00     +5.85    2550.00     -4.16
 LME Nickel   24650.00      500.00     +2.07   24750.00     -0.40
 LME Tin      28350.00      350.00     +1.25   26900.00      5.39
 LME Zinc      2188.00       97.00     +4.64    2454.00    -10.84
 SHFE Alu     16580.00     -110.00     -0.66   16840.00     -1.54
 SHFE Cu*     66680.00      340.00     +0.51   71850.00     -7.20
 SHFE Zin     16880.00       30.00     +0.18   19475.00    -13.32
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Editing by Anthony Barker and Marguerita Choy)

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