Metals shine on brighter prospects for China

 
Jessica Morris
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Alcoa Aluminum Factory
Aluminium the top gainer on the London Metal Exchange over the past month (Source: Getty)

Industrial metals shined today, helped by a renewed bout of optimism over the Chinese economy.

Metal prices are tied to the outlook for the world's second biggest economy, which is the world's biggest metals consumer. They have started to climb out of a rout recently, sparked by signs that the market is recovering. Citigroup has said there's evidence virtually all commodities have stared at a price bottom.

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Aluminium climbed 2.2 per cent to close at $1,622.50 per tonne today, the strongest since October 2015. It's the top gainer on the London Metal Exchange over the past month, up some six per cent after producers cut output.

A bounce in oil prices also helped send zinc to the highest since July last year, and copper to a four-week high. Copper ended up 0.9 per cent at $4,981 per tonne, while Zinc rose 0.2 per cent to close at $1,940 per tonne.

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Iron ore hit a 10-week peak of $64.77 per tonne, boosted by major miners cutting their ambitious production targets, citing bad weather and rail network maintenance at its mines in Australia.

The world's third-largest iron ore producer, BHP Billiton, lowered its 2016 output guidance by 10m tonnes yesterday. It followed in the steps of Rio Tinto which recently slashed its 2017 forecast by 20m tonnes.

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