Nickel fell as low as $4.50 at the New York open, but about-faced and pushed almost to $5 before easing late and closing at $4.8799/lb., up 25½ cents. Zinc also featured a steady upward progression to its intraday high of $0.5318/lb., up almost 2½ cents. Aluminum had a choppy trading day but managed to push to $0.8502/lb., up a penny and a half, while lead had a very strong day, ending at its intraday high of $0.6149/lb., up nearly 5 cents.

Copper led the industrial metals on a rare concerted upswing as the slippage in the dollar made them more attractive and traders took some heart from equities markets that rebounded from dismal lows to post powerful gains on the day.

News out of China got some close scrutiny.

The Chinese reported that copper output dropped 8% on the year in October, to an eight-month low, as manufacturers cut production in response to weakening demand.

“That’s not a surprise,” said Judy Zhu, an analyst at Standard Chartered Bank in Shanghai. “We’ve heard production cuts by smelters lately and I don’t think it’s going to create tight supply in the international market because the smelters are just trying to keep their inventory in check.”

At the same time, October industrial production rose only 8.2% in China, the statistics bureau said. The year-over-year gain was smaller than any economist had forecast in a Bloomberg survey.

“There has been a significant deterioration in momentum” in Chinese production, wrote analysts at Barclays Capital in London, and that “bodes ill for metals consumption.”

Meanwhile, aluminum inventories monitored by the LME rocketed up by 44,425 metric tons yesterday, to more than 1.56 million tons, a better than 15-day global supply, and the highest level on record for the contract.

Source: Base Metals All Push Higher, Getting a boost from Equities Markets

Zinc was strong, ending just off its intraday high at $0.5375/lb., up nearly 5 cents. Aluminum hit 97 cents before beating a sharp retreat back to $0.9479/lb., up three-quarters of a penny, while lead shot up to $0.6728/lb., up 3¼ cents.

Copper led the industrial metals on a tear yesterday, shooting up the most in two years, as traders became consumed with optimism generated by the Federal Reserve.

The metal is up 25% so far during this comeback week.

The price of copper is also likely to be supported by “supply-side vulnerability,” according to analysts at Barclays Capital. Much of its runup of the past several years has to do with mine accidents, labor unrest and lower ore grades, all of which left miners scrambling to meet demand.

But, “Given the worsening sentiment about the global economy, this rally could well be short-lived,” Barclays added. “The demand picture for metals consumption continues to remain weak.”

“We have just had a massive sell-off and prices have gone well into the cost curves for a lot of the commodities, particularly nickel and zinc,” said Jim Lennon, analyst at Macquarie Bank.

Chile, the largest copper producing country, reduced its 2008 copper output forecast for the second time since July, this time to 5.45 million metric tons, mostly due to operational issues. The Chilean Copper Commission also said falling prices may slow the pace of investments in some of the nation’s mining projects after 2009.

China’s central bank chipped in, slashing banks’ benchmark lending and deposit rates by 0.27%, the third cut in six weeks. “There was clear evidence that growth in China was slowing both in data and officials saying that … we’ll see more moves to stimulate growth over the next six months or so – everywhere but specifically in China,” said Robin Bhar, a metals analyst at Calyon in London.

Source: Industrial metals agree, All push higher on Fed move