LME MIDDAY

DJ LME MIDDAY: Lead Extends Strength On Supply Worries
LONDON (Dow Jones)--London Metal Exchange lead extended its recent strength to hit a fresh record high Monday, with analysts expecting further moves to the upside despite a holiday in the U.S.
Three-month lead pushed to a record high of $1,810 a metric ton Monday, up over 1% from Friday. At 1158 GMT, lead traded at $1,805/ton.
The recent price strength seen in LME lead might have further to run due to low stock levels, short covering, and ongoing supply concerns, said William Adams of BaseMetals.com/ Short covering seen above $1,750/ton and $1,770/ton have helped to push prices sharply higher, Adams added.
News last week that Xstrata PLC declared force majeure at its Northfleet lead refinery in the U.K. following reduced supplies from its Mount Isa smelter in Australia, provided further upside momentum. Northfleet produced around 161,350 tons of lead last year, using feedstock from Mount Isa.
LME lead stocks fell 825 metric tons to 32,475 tons Monday, adding to price strength, and have fallen roughly 20% since the start of 2007.
"Dips should be well supported (across the base metals) given various supply-side issues which have come to the fore," said Robin Bhar of UBS.
However, analysts said trading volumes may be light in the afternoon session because the U.S. is closed for the Presidents Day holiday.
Three-month nickel consolidated near its recent record high of $39,501/ton underpinned by another large cancelation in warrants.
Despite an increase in nickel stocks by 282 tons to 4,152 tons Monday, with canceled warrants - or material accounted for and to be drawn down at a later date - at 51% Monday, available stocks comprise roughly one day's worth of global nickel consumption.
At 1159 GMT, three-month nickel traded at $39,000/ton, up 0.25% from Friday.
In other metals, copper also consolidated within its recent range, underpinned by a 2,725-ton drawdown in stocks to 211,075 tons. At 1159 GMT, copper traded at $5,825/ton, up 0.2% from Friday.
Aluminum traded slightly below $2,800/ton pressured to the downside by a 3,150-ton increase in aluminum stocks to 764,975 tons. At 1159 GMT, aluminum traded at $2,799/ton, up 0.1% from Friday.
Ongoing political tensions in Guinea - the world's largest exporter of bauxite - have helped keep aluminum prices afloat despite the head of Guinea's military relaxing a nationwide curfew on Sunday.
Bauxite is a key raw ingredient to make alumina, which is in turn refined to make aluminum.
Late last week, Alcoa said a partial restart of production is in progress at the CBG bauxite operations in Guinea. However, Alcoa was unable to say whether bauxite shipments had resumed.
Guinean President Lansana Conte declared martial law early last week after dozens died in riots and clashes between protesters and security forces over Conte's appointment of a political ally as prime minister.
In other news, Dubai Aluminium, the United Arab Emirates' largest aluminum producer, said over the weekend that it will raise production capacity to more than 920,000 tons a year by 2008 to help it meet rising international demand. Dubal's production capacity presently stands at 861,000 tons a year.
In addition, the company has entered into a joint venture with Abu Dhabi investment firm Mubadala to build the world's largest aluminum smelter with a capacity of 1.4 million tons a year in Abu Dhabi at a cost of $8 billion.