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Most metals ease after surge that took zinc to highest in decade
[LONDON] Most industrial metals eased back after a rally that took zinc to the highest level in almost 10 years on signs of supply curbs and faster economic growth around the world.
Zinc slipped 0.6 per cent to US$3,101.50 a metric ton by 10.56 am on the London Metal Exchange (LME) after earlier touching US$3,147. The metal soared by its daily limit to 25,975 yuan a ton on the Shanghai Futures Exchange. Its rally was spurred by data showing China's daily production in July contracting to the lowest level in three years.
Copper on the LME rose to a near three-year high, before slipping 0.3 per cent to US$6,510.50 a ton. Aluminium also pulled back from its strongest level in almost three years, while tin and nickel traded higher.
Questions remain over whether physical demand will "support this rally come September or October or will the market have gone too far too fast," said Malcolm Freeman, a director of West Malling, England-based brokerage Kingdom Futures.
The world economy is on its way to a year of faster growth after rising at its most rapid pace in 2 1/2 years in the second quarter, with previous laggards such as Japan and the euro area now recovering. Metals have also been given a fillip by a weaker dollar, down 8 per cent this year against major currencies.
"On the macro front, prices seek support from weak US dollar and upbeat risk appetite," Kotak Commodities Services said in a note.