Aug. 19 (Bloomberg) -- Aluminum and zinc rose in London as a jump in home building fueled speculation that demand will accelerate in the U.S., the world’s second-biggest consumer of industrial metals.
Housing starts surged in July to the highest in eight months, U.S. government data showed today. Yesterday, a private report showed confidence among home builders rose in August to the highest in seven months. Zinc goes into household products including brass plumbing fixtures, while aluminum is used in window frames and other building components.
“Two days in a row of decent housing and building numbers is pretty good, especially for a base metal like zinc, which is used in galvanized steel,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “That’s a big part of demand.”
Zinc for delivery in three months climbed 0.9 percent to $2,302 a metric ton at 5:50 p.m. on the London Metal Exchange. That’s the biggest increase since Aug. 12.
Aluminum for three-month delivery gained 1 percent to $2,039 a ton. The metal also advanced 1 percent yesterday.
The fee to borrow aluminum for a day in London reached $9 a ton, the highest since December 2012. The construction industry accounts for 20 percent of world usage, according to United Co. Rusal, the largest producer.
Aluminum for immediate delivery closed yesterday at a $1.25-a-ton discount to the three-month contract, the smallest gap since Dec. 17, 2012. Stockpiles monitored by the LME are at the lowest since September 2012.
Copper fell 0.5 percent to $6,867.50 a ton ($3.12 a pound) on the LME. Lead and nickel rose, while tin declined.
On the Comex in New York, copper futures for delivery in December lost 0.5 percent to $3.119 a pound.
--With assistance from Agnieszka Troszkiewicz in London.