RTRS: METALS-LME aluminium rallies 0.8 pct to highest in nearly 3 yrs
(Adds quotes, details, updates prices)
SINGAPORE, April 28 (Reuters) - London Metal Exchange aluminium rose to its highest in nearly three years on Thursday in a cross-commodity market rally on a weaker dollar following dovish comments from the U.S. Federal Reserve.
London Metals Exchange aluminium for three month delivery rallied 0.8 percent to $2,765 a tonne, its highest since August 2008. London copper gained 1.5 percent to $9,461.75.
"Aluminium is rising following a bullish market for all metals," a Sydney-based LME trader said. "Also driving it are rising crude oil prices, given their close energy correlation. There is a sense that production costs will rise. At this point, people are not taking into account the high inventories. The Chinese also said they are replacing old capacities so people feel the market is not going to soften."
Fed Chairman Ben Bernanke signalled on Wednesday the U.S. central bank was in no rush to scale back its support for the economy and repeated plans to keep overnight interest rates, held near zero since December 2008, extraordinarily low for "an extended period". [ID:nN26291565]
U.S. crude futures rose in early trade on Thursday, to their highest in 2-1/2 years, with NYMEX crude for June CLc1 gaining 78 cents to $113.55 a barrel by 0022 GMT, after rising as high as $113.70. Brent LCOc1 gained 62 cents to settle at $125.75 a barrel.
The July Shanghai copper contract SCFcv1 rose 0.3 percent to 69,740 yuan.
"Everyone has been on the sidelines in the last few days, waiting to see how this Fed meeting turns out. Now, with the assurance from the Fed and a weak dollar, many in the market are trying to take on some positions before the four-day holiday weekend on the LME," said Pinaki Rath, managing director of Gold Matrix Resources.
The LME will be closed on Friday for Britain's royal wedding, and on Monday for the May Day holiday, which will also be the Labour Day holiday for the Shanghai Futures Exchange.
However, analysts were also eyeing possible price pressures from U.S. GDP figures, which will be released at 1230 GMT on Thursday, with some estimating that the figure will be lower than the previous market forecast of a 2 percent rise.
UBS analyst Dominic Schnider said he pegged the figure at "closer to 1 percent".
"I'm not upbeat about the U.S. economy so a lower-than-expected GDP figure will not surprise me. I think the effect of the data will only be felt later since the data will only be released after Shanghai closes today. For now, the market has priced in a lot of pessimism and treats any good news as a bonus," Rath said.
Copper also benefited from a weaker greenback with the dollar index falling on Thursday to a fresh three-year low of 73.259, its lowest since August 2008. [ID:nTKW007265]
Positive sentiment from the Fed meeting also boosted U.S. crude futures, which rose in early trade on Thursday to their highest in 2-1/2 years. [ID:nL3E7FS02N]
The volume-weighted average for the LME complex rose 1.27, while the Shanghai complex rose 0.42 percent by 0540 GMT. (Reporting by Nick Trevethan; Editing by Clarence Fernandez)