Aluminum climbs as global surplus may narrow

Source: Dukascopy Bank SA
Industrial metals moved higher despite concerns over a potential slowdown in US demand after US GDP unexpectedly shrank in Q4 of 2012. Base metals found support on hopes easing measures by the Fed will stimulate US economy thus pushing up consumption of industrial metals.

Aluminum and Nickel continued their upward movement on speculation that production cuts of Rio Tinto and BHP Billiton may result in significant reduction in global surplus. However, bloated LME inventories and weak US data capped gains of the metals.

Copper surged after the Fed announced its decision to continue its growth-boosting measures. At the same time, the red metal's jump was restricted by weak spot demand in China and signs of rising global output. Production in Chile, Africa and China is expected to rise further in 2013.

Zinc advanced the most since the beginning of the month on hopes for robust demand from China as Chinese investors are likely to continue to use the base metal as financing tool this year. However, the metal remained under heavy pressure from persistent surplus on the physical markets.
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