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LONDON - Aluminium prices in London touched a 16-week high on Friday due to a fund buying triggered by the fresh economic stimulus measures in top metals consumer China.
Three-month aluminium on the London Metal Exchange rose 1.2% to $2,641.50 per metric ton by 1026 GMT after hitting $2,659, the highest since June 6.
Prices of the metals, used in the construction, transportation and packaging sectors, are on track for a 6.3% weekly growth.
Other growth-dependent metals also rallied this week as China rolled out its most aggressive stimulus package since the pandemic ahead of the Golden Week holiday on October 1-7.
Buying by funds, known as commodity trading advisors (CTAs), which are largely driven by computer programs, still continues in aluminium, while the support of this factor in most other metals weakened, said a trader.
The global aluminium market will see a deficit next year, analysts at BofA said this week, adding that prices would trade at $3,000 per ton in 2025.
There are also "pockets of tightness on the physical market, with nearby time spreads closely tilting into backwardation partially because more than half of LME inventories are earmarked for removal," BofA added.
LME copper was down 0.6% at $10,019 after hitting $10,095, its highest since June 7.
While China's industrial profits swung back to a sharp contraction in August, some analysts believe that the fresh stimulus is not enough to significantly impact demand for industrial metals.
"For the property market to recover, we need to see prices at least stabilising and we need to see excess housing inventories come down toward historical norms. Until then, the drag on growth will continue," said Ewa Manthey, a commodities analyst at ING.
LME nickel rose 1.1% to $16,915, while zinc fell 0.3% to $3,090, lead eased 0.1% to $2,133.50 and tin was steady at $32,325.
(Reporting by Polina Devitt in London; additional reporting by Mai Nguyen in Hanoi; Editing by Sumana Nandy)