London. Low inventory levels, combined with favorable supply and demand fundamentals, will benefit copper and zinc ahead of other London Metal Exchange metals, Investec Asset Management said on Wednesday. George Cheveley, a manager on the global commodities team, said that base metal prices were now at reasonable levels. “Supply has been cut in zinc much more aggressively earlier this year, and in copper it has always struggled to meet demand over the last few years,” he said. Copper traded at $5,183 a metric ton midday on Thursday in London, and is up about 60 percent this year. Zinc was at $1,512 a metric ton. Copper hit an all-time high of $8,940 a metric ton in July 2008, while zinc touched a record high of $4,580 in November 2006. LME inventories in copper are at 261,100 metric tons — its lowest level since November 2008, while zinc is at 353,850 metric tons — down from levels above 780,000 metric tons in April 2004. Investec forecasts copper to average $4,600 a metric ton this year, with zinc seen at about $1,700 or $1,800 a metric ton. Next year, it sees copper prices at an average of $5,400. Cheveley said that after the seasonal summer lull, Chinese demand would stay robust, while the end of destocking in the West would support copper and zinc. Aluminum, used in the transportation and packaging industries, traded at $1,644 a metric ton, while steel ingredient nickel was at $15,777. Aluminum stocks are currently at record levels above 4.5 million metric tons, while nickel inventories remain near record highs above 108,000 metric tons. “In aluminum and nickel, we’ve seen big increases in supply overtaking demand in the past year in a big way,” Cheverly said. Like other base metals, both and nickel have experienced a strong recovery this year, as Chinese stockpiling boosted prices. “There has been very good fundamental demand in China,” Cheveley said. “Fundamental underlying demand has been very strong in China and it’s not just about Chinese government intervention of stockpiling.”

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