Zinc prices hit a seven-week high after stocks in Shanghai slid to the lowest in more than a decade and other metals rallied as speculators cancelled bearish positions.

Prices broke above technical levels on Friday, spurring further bursts of buying on the last trading day of the quarter, traders said.

Zinc inventories in warehouses monitored by the Shanghai Futures Exchange slid 13.6 per cent to 29,204 tonnes, the lowest since September 2007, weekly data showed.

‘We’re talking 10-year lows in inventory,’ said analyst Colin Hamilton at BMO Capital Markets in London.

‘While there’s definitely more mine supply coming through in zinc, the refined inventories are tight’ .

Benchmark zinc on the London Metal Exchange was the biggest gainer, surging 4.2 per cent to close at $US2,612 a tonne, the strongest since August 9.

Zinc shed about eight per cent during the quarter in its third straight quarterly loss.

Speculators were tidying up their portfolios before the end of the quarter and also before China goes on a week-long market holiday, traders said.

‘We’ve seen many of these metals relatively short in positioning, so some of that might be cleaned up ahead of quarter end,’ Hamilton said.

Unionised workers at Alcoa’s Western Australian alumina and bauxite operations agreed on Friday to end a strike that lasted more than six weeks.

‘It looks like some alumina trades are coming in significantly lower on the back of that news,’ Hamilton said.

LME aluminium gained 1.6 per cent to end at $US2,062 a tonne, erasing losses after touching a one-week low of $US2,016.

Weighing on aluminium was news on Thursday that China decided not to impose blanket cuts on industrial output in 28 northern cities this winter, expected to result in less restrictions on aluminium supply.

LME nickel added 0.3 per cent to finish at $US12,600 and ended the third quarter down 15.3 per cent, its biggest quarterly drop in three years.

Lead climbed 1.3 per cent to $US2,036, sliding 15.5 per cent during the quarter in the steepest quarterly loss since 2001.

‘Ahead of the October options expiry next week we note the $US2,000 show a combined open interest of just 75 lots,’ Alastair Munro at Marex Spectron said in a note.

‘However the $1,950s show 257 of put open interest.’

Copper rose 1.2 per cent to close at $US6,258 a tonne and tin added 0.1 per cent to $US18,875.