Lead Rises on Signs of Battery Demand; Aluminum Halts Decline

By Claudia Carpenter

Sept. 4 (Bloomberg) -- Lead rose the most in a week on signs of purchases by car battery makers before their busiest time of the year. Aluminum advanced, halting the longest drop since 2001.

U.S. vehicle sales were an annual 13.7 million units in August, Autodata Corp. said yesterday, exceeding economist estimates. Declines in lead inventories since June have accelerated, slumping 14 percent in the past two weeks.

Demand is ``reasonably good'' and ``you can see that in the stockpiles, which would hint at restocking by battery manufacturers,'' said Robin Bhar, an analyst at Calyon in London. ``The fourth and first quarters are seasonally the strongest.''

Lead for delivery in three months climbed $44, or 2.3 percent, to $1,990 a metric ton as of 12:33 p.m. on the London Metal Exchange. Prices rose as much as 3.8 percent after the LME reported another 450-ton decline in inventories, to 78,700 tons, the lowest since June 12.

Global demand will probably exceed supply by 20,000 or 30,000 tons this year as Ivernia Inc.'s Magellan mine in Australia halted exports, Bhar said, citing estimates by Calyon. Supplies from the mine next year will probably put the market into a surplus of about 100,000 tons, he said.

Aluminum rose $15 to $2,690 a ton, the first increase since Aug. 21.

Copper jumped $25 to $7,375 a ton. Even with prices heading for a seventh annual gain, copper mine production declined 2.6 percent this year through June, John Tumazos, founder of U.S.- based Very Independent Research LLC, said.

``The biggest surprise to me this year has been mine output has fallen for a number of commodities,'' with nickel output down 6 percent, he said.

Zinc advanced $42 to $1,830, nickel gained $25 to $19,600 and tin climbed $360 to $19,710 a ton.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net or ccarpenter2@bloomberg.net