LME REVIEW

LONDON (Dow Jones)--London Metal Exchange lead surged to a fresh record high Friday before coming under slight pressure along with the rest of the complex, but traders expect volatility Monday with the U.S. out on holiday.
"Many of the base metals came off Friday but not by very much," said one LME analyst in New York. "It's been a relatively quiet day."
U.S. traders squaring positions ahead of the long weekend have also added to price pressure, said another trader in London. Monday, the markets might see some volatility as traders try to move prices while the U.S. is out on holiday, the trader added. The U.S. marks President's Day Monday.
Three-month lead surged to a new record high of $1,805 a metric ton, driven by technical and systematic buying, a continual drawdown in LME inventories and ongoing supply concerns. The metal rose to a PM kerb of $1,785 a metric ton, up roughly 1% from Thursday.
LME lead stocks fell 900 tons to 33,300 tons Friday. Lead inventories have fallen over 20% since the start of 2007.
News earlier this 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.
In other metals, three-month aluminum fell nearly 1% to a PM kerb of $2,793/ton on news that Alcoa said a partial restart of production is in progress at the CBG bauxite operations in Guinea.
Bauxite is the raw ingredient to make alumina, which is in turn refined to make aluminum and Guinea is the world's largest exporter of bauxite.
However, Alcoa was unable to say whether bauxite shipments had resumed. Shipping companies told Dow Jones Newswires earlier that vessels to transport bauxite from Guinea remain outside the port and aren't expected to be able to return to next week at the earliest.
Nevertheless, aluminum prices didn't fall sharply on the news because the ongoing tightness in the nearby spreads is underpinning prices, said the New York analyst.
Earlier Friday, three-month tin surged to a record high of $13,300/ton before retreating to a PM kerb of $13,140/ton. Support was driven by ongoing supply problems in Indonesia and declining stocks.
Earlier Friday, an Indonesian trade official said state-owned tin producer PT Timah Tbk. can no longer legally export tin as it hasn't been reissued with an export license under new regulations.
Indonesia recently shut down its private mining and smelting operations on Bangka island, where the country's largest tin reserve is located.
Indonesia's PT Koba Tin - a key industry player - said recently that it is still allowed to mine and smelt tin from Bangka-Belitung province while it is under police investigation. Industry sources say Koba, which produces around 24,000 tons of tin a year, is only shipping about 20% of its normal amount.
A decline in tin stocks by 20 tons to 10,225 tons Friday added to price support. Tin inventories have fallen by roughly 20% since the start of 2007.
Three-month nickel prices fell to a PM kerb of $38,900/ton, down over 1% from Thursday on trade selling. Adding to price pressure, nickel stocks rose by 162 metric tons to 4,152 tons Friday.
However, with canceled warrants - or material accounted for and to be drawn down at a later date - at 52% Friday, available stocks comprise less than half a day's worth of global nickel consumption. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Thursday PM kerb
Copper 5805.0-5810.0 Dn 35
Lead 1785.0-1790.0 Up 30
Zinc 3380.0-3385.0 Dn 45
Aluminum 2793.0-2795.0 Dn 21
Nickel 38900.0-39000.0 Dn 600
Tin 13140.0-13145.0 Up 65
Aluminum Alloy 2210.0-2230.0 N/A
Aluminum Alloy 2180.0-2200.0 Dn 20