LONDON: Copper hit its highest level in more than two years on Monday, buoyed by expectations of more quantitative easing (QE) in the United States , eroding the dollar and making metals cheaper. Benchmark copper was untraded in official rings but bid at $8,325 a tonne versus Friday's close of $8,300 as industry players met for the annual London Metal Exchange (LME) Week gathering. The metal used in power and construction had jumped earlier on Monday to $8,388 a tonne, its highest since July, 2008. "Equity markets and other financial markets have all taken heart from the fact that the Fed looks as if it will do some QE rather than not," Robin Bahr, analyst at Credit Agricole, said. "The U.S. dollar remains weak, the jobs report was fairly poor on Friday." The U.S. dollar slipped after world finance ministers failed to reach agreement on currency imbalances, leaving the U.S. Federal Reserve set to pursue loose monetary policy to support its ailing economy. A weak dollar makes dollar-priced metals cheaper for European investors. U.S data on Friday showed that the economy shed jobs for a fourth straight month in September, hit by government layoffs and slower private hiring. LME Week, which gathers miners, smelters, consumers and investors for meetings, seminars, receptions and cocktail parties in London, historically generates volatility and tends to set the tone for the final quarter. "In most LME Weeks you tend to see prices moving higher particularly when you have a fairly bullish environment as we have now," Bhar said. BASE METALS FUND UK-based ETF Securities said on Monday it will introduce physical exchange-traded products for copper, aluminium, zinc, lead, tin, nickel and a basket of the six major base metals. However, it has no date, as yet, for the launch. An exchange-traded product backed by physical copper could be a big hit with investors, but it has the potential to change fundamentals and trigger violent price swings. Deutsche Bank said that a physical copper exchange-traded product could account for between 300,000 to 400,000 tonnes of demand. Market balances in copper have been tightening for many months, with stocks in LME warehouses tumbling more than 30 per cent since the middle of February. However, latest data showed LME stocks edged up 475 tonnes to 372,475 tonnes. China's State Reserves Bureau said it had not sold copper into the market, scotching speculation that it had been funnelling material to buyers in response to rising prices. Among other metals, aluminium traded at $2,424 a tonne in official rings from Friday's close at $2,420. It had earlier hit its highest since April at $2,438 a tonne. Tin traded at $26,290 a tonne from $26,350 on Friday. Last week, it hit a record peak at $26,790, underpinned by tight supply from top exporter Indonesia and low stocks. Stainless steel material nickel traded at $24,500 in rings from $24,400 on Friday, while battery material lead traded at $2,301 from $2,270 a tonne on Friday. Zinc was untraded in official rings but bid at $2,333 from $2,289 a tonne.

Source