Base metals close higher

Base metals on the London Metal Exchange (LME) have closed higher amid an improvement in near-term risk appetite in financial markets and the return of Chinese investors after Lunar New Year celebrations outweighed a weaker-than-expected reading on the US labour market.


At the close of open-outcry trading in the London ring on Friday, LME three-month copper was up 0.2 per cent at $US7,141 a metric ton.

Aluminium rose 0.4 per cent to $US1,720 a ton, while zinc climbed 1.3 per cent on the day to $US2,022 per ton.

“Most metals hit multi-week (multi-year in aluminum’s case) lows early in the week but they then rallied strongly ahead of the resumption of trading on the Shanghai Futures Exchange,” noted BNP Paribas commodities strategist Stephen Briggs.

“Zinc has recovered particularly impressively; we are not alone in favouring this metal.”

The risk-related metals recovered as emerging market jitters eased and a degree of risk appetite returned to global markets.

The improved sentiment in the LME complex even withstood a downbeat reading on the US labour market on Friday.

The Labor Department said the US economy added 113,000 jobs last month, fewer than the 189,000 increase forecast by economists. As base metals are used in a variety of different sectors for a range of applications, such disappointing data on economic activity can push prices lower.

But prices were robust as Chinese buyers returned from their holidays. The absence of the top consumer had weighed upon market activity and trading volumes. Next week, Chinese trade data will be keenly eyed for price direction, analysts said.

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