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DY: Zinc surges to 15-month peak as Chinese factories revive
 
By Eric Onstad
LONDON, Sept 1 (Reuters) - The price of zinc surged to its highest in more than 15 months on Thursday, with other metals also rallying, after upbeat factory data from top metals consumer China spurred buying.
Tin prices jumped to a 19-month peak as inventories slid and lead climbed to its strongest in more than 14 months, though aluminium dropped to a one-month low on oversupply concerns.
Activity in China's manufacturing sector unexpectedly expanded at its fastest pace in nearly two years in August as construction boomed, suggesting the economy is steadying in response to stronger government spending.
"It buoyed sentiment, it showed the metals-intensive manufacturing sector has rebounded," said Robin Bhar, head of metals research at Societe Generale in London.
"The big question is whether that rebound will be sustained over coming months. It's doubtful because China's infrastructure and fiscal stimulus of the first half is beginning to fade."
Benchmark zinc on the London Metal Exchange rallied to $2,338.50 a tonne, its highest since May 2015, before paring gains. It failed to trade in official open outcry activity and was bid up 0.6 percent to $2,325.
"No technical sign yet of the uptrend weakening, so days ahead are still bright for zinc, it seems," broker Triland said in a note.
Sister metal lead was bid up 1 percent at $1,924, its most expensive since June 2015, while tin climbed 1.1 percent to be bid at $19,075, its highest since February 2015.
Tin has been the LME's second-strongest performer behind zinc this year with gains of 31 percent, partly attributable to a steep erosion of inventories.
On-warrant tin supplies in LME warehouses -- those not earmarked for delivery and therefore available to investors -- dropped on Thursday by 150 tonnes to 2,750 tonnes, the lowest since June 2005.
LME copper was bid up 0.3 percent to $4,632 after ending little changed in the previous session. Prices on Tuesday fell to the weakest since June 24 at $4,600, which traders said marks a near-term floor, amid mounting supply.
LME exchange stocks rose again on Thursday by 11,250 tonnes to 304,775, up 50 percent over the past three weeks.
The dollar index was flat, its advance put on hold ahead of the closely watched U.S. non-farm jobs report on Friday, which is expected to shape the market's near-term interest rate expectations.
A stronger dollar curbs demand for commodities because it cuts into their affordability for those paying with other currencies.
Aluminium bucked the stronger trend on the LME, trading down 0.4 percent in official rings at $1,607.50, the weakest since July 28. Nickel was bid up 0.3 percent to $9,790.


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