By Chris Flood
Published: December 10 2009 12:01 | Last updated: December 10 2009 12:01
Aluminium traded at its highest levels of the year on Thursday, leading the base metals sector higher while oil prices made a partial recovery after falling sharply in the previous session.
Aluminium reached $2,280 a tonne, up 48 per cent this year, helped by a fall of 3,150 tonnes in LME stocks.
Michael Jansen, analyst at JP Morgan said that although aluminium prices had risen strongly in 2009, industry profitability had not nearly improved as much as this rally would imply and that European producers would struggle to make profits.
Copper, up just 0.1 per cent at $6,850 a tonne, lagged its peers in the base metals sector, struggling for momentum in the face of rising stock levels, up 3,125 tonnes on Thursday.
Crude oil prices made a modest recovery after falling sharply in the previous session in response to US inventories data which showed unexpectedly large increases in both petrol and distillate stocks.
Nymex January West Texas Intermediate added 53 cents at $70.20 a barrel, while ICE January Brent rose 61 cents to $73.00 a barrel.
Eugen Weinberg, commodity strategist at Commerzbank, said US crude prices could to fall below the $70 mark in coming days as financial investors were likely to scale back their exposure to to the oil market towards the end of the year to lock in any profits.
Commerzbank noted that US crude oil stocks at Cushing, Oklahoma, the delivery point for WTI had increased 2.5m barrels and were approaching record levels, suggesting further downward pressure on the spot WTI price.
Gold traded at $1,124.30 a troy ounce after ending Wednesday’ session in New York at $1,128.30, looking to developments in the dollar for further impetus.
Cocoa prices traded near 25-year highs amid supply concerns. Liffe March cocoa dipped 0.1 per cent to £2,264 a tonne amid worries that the market will face a global supply shortfall for a fourth successive year due to disease affecting yields in Ivory Coast, the world’s largest cocoa producer.
Liffe May cocoa, the benchmark from mid-December, which has more liquidity than the March contract, also traded 0.1 per cent at £2,285 a tonne.
