Base Metals Rise On Investment Buying Spree February 28, 2008

London, 27 February 2008 - Base metals prices rose sharply during early trading on the LME on Wednesday, as investment funds embarked in another buying spree across commodities markets, sending aluminium to new 21-month highs above the $3,000 level and tin to fresh historic peaks.

Other commodities were buoyant as well -- in precious metals, gold hit fresh all-time highs near $960 an ounce, silver soared to its best since October 1980 and palladium set new 6-1/2 year peaks, while crude oil touched fresh historic highs above $101 a barrel.

This rally was spurred by softer US economic data and a weaker dollar, which by making dollar-denominated commodities less expensive in other currencies, raised their appeal as alternative and safer investments.

The rally in oil also raised inflation worries, fuelling more safe-haven buying in favour of commodities.

Aluminium was the biggest gainer, touching $3,026 a tonne, up $48, or 1.6 percent from the Tuesday close, and the highest since mid-May 2006, when it had reached an all-time high of $3,310.

Fundamentally, the market has been driven higher recently by news of production curbs in China and Southern Africa that may lop some 500,000 tonnes off annual production this year.

Tin climbed to a new historic peak at $18,125 a tonne, up $175 from Tuesday and 11 percent so far this year.

The move is being underwritten by supply-side factors -- LME inventories are at their lowest for 8-1/2 months and exports from top producers Indonesia and China remain low.

Copper traded at $8,360 a tonne, up $85 but below the 21-month peak of $8,485 hit on Monday, while zinc gianed $40 at $2,530 and lead rose by $60, or 1.9 percent , to $3,300.

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