Tin touches 19-yr high on LME

Tin jumped to the highest since at least 1989 on the London Metal Exchange. Nickel rose to a record for a fifth consecutive trading session. Tin for delivery in three months on the LME gained $110, or 0.9 per cent, to $11,900 a metric ton as of 8:17 am local time. Nickel increased $100, or 0.3 per cent, to $37,400 a tonne, beating yesterday's record by $99.

Nickel reached a record $37,301 a tonne yesterday as stockpiles tracked by the London Metal Exchange fell to 5,052 tonne, less than two days of global use.

The metal, which is used to make stainless steel, has more than doubled in the past year.

Five years ago it traded at $5,775, according to Bloomberg data. The price of zinc, used to rust-proof steel, reached a record $4,580 a metric tonne last November. It has since fallen 19 per cent to $3,690 yesterday. Five years ago it traded at $801. Lilley said institutional investors would commit a greater share of their assets to commodities to diversify their holdings. "Total assets held by institutional investors are around $50 trillion globally," the slides showed. "Direct commodity investments at $120 billion represent less than one quarter of 1 per cent of this global portfolio.''

Global hedge funds, loosely regulated pools of capital that bet on price rises and declines, account for about $1.1 trillion, Lilley's slides showed, citing figures from Barclays Capital, the investment banking unit of Britain's Barclays.

The move towards greater commodity investment "remains in its infancy,'' according to the slides. "We believe that fund diversification flows into commodities as an asset will continue to support pricing'' of metals.