Aluminium and copper rise in LME

Aluminium on the London Metal Exchange (LME) have closed out the week considerably higher, after upbeat economic data out of Europe and the US stoked hopes for improved demand for these assets.

At the close of open-outcry trading on Friday, LME three-month copper was 1.1 per cent higher on the day at $US7,094 a metric ton. Aluminium also rose 1.1 per cent, to close the week at $US1,909 a ton.

Data on Friday showed German business sentiment rebounded sharply in November with Ifo's business confidence index rising to 109.3, up from a revised 103.7 in October and beating forecasts of 107.7. This followed upbeat labour and factory activity reading from the US.

Industrial metal prices are sensitive to such positive shifts in economic metrics as they are used in various applications throughout many sectors within any given economy. The European and US data points overrode jitters about Chinese demand and the potential withdrawal of economic stimulus measures in the US, which had pressured aluminium and copper prices to multi-month lows earlier in the week.

Analysts at Barclays bank on Friday said the supply-versus-demand outlook for base metals was looking up.

"With LME inventories for most base metals either flat or falling, Chinese demand surprising to the upside, and market balances tightening, the recent move lower in base metals prices has little to do with fundamental signals," they said, cautioning investors against taking an overly negative view on this asset class at current prices.

The bank added that for metals including nickel and aluminium, recent price slips down toward the year's lows has left scope for higher prices moving into the new year.