LONDON, Mar 23, 2011 (Dow Jones Commodities News via Comtex) -- Base metals closed higher on the London Metal Exchange Wednesday, shrugging off a modestly firmer dollar as investors focused on the potential for growing demand in the medium term.
There was "little in terms of sector-specific news in any of the metals," MF Global analyst Ed Meir said. Nevertheless prices rallied strongly, with LME three-month copper closing the session 2.5% higher at $9,726 a metric ton.
Traders said a breach of technical resistance spurred the red metal's solid gains, triggering fresh buying activity and a short-covering rally.
Market players said investor interest in the commodities is also growing amid expectations Japan will require significant imports as it rebuilds damaged infrastructure following the March 11 earthquake and tsunami. The fundamental backdrop for the base metals is broadly positive as well, with seasonal factors expected to drive up demand in the second quarter.
Lead "should be the first of the complex to get a demand-side boost from the crisis in Japan," Credit Agricole said, as back-up and standby generators for infrastructure, utilities and businesses boost metal usage. Three-month lead ended the kerb up 1.7% at $2,715/ton.
Three-month tin meanwhile was also up strongly, closing the session 3.9% higher at $31,300/ton.
Meir said the metal's close above $30,000/ton should "shift the trading range somewhat higher."