Copper, Aluminium prices hit two-month high
Copper and aluminium touched two-month peaks on Monday as signs of a pickup in top metals consumer China and expectations of encouraging euro zone data countered a rise in the dollar. Three-month copper on the London Metal Exchange rose 0.44 percent to $7,306 a tonne by 1429 GMT after hitting its highest level since June 7 at $7,318.50 and marking its fifth straight day of gains. Aluminium climbed 1.34 percent to $1,897 a tonne, the highest since June 12.
Copper finished last week up 3.8 percent, the biggest weekly gain since September 2012, helped by Chinese trade data that showed stronger imports across all major commodities. Refined copper imports have risen 50 percent since April.
"The sharp increase in (copper) imports suggests domestic demand is holding up well despite the recent credit tightness," Sucden analyst Kashaan Kamal said. "Improving factory production provides further evidence of resilient demand. However, restocking by Chinese companies could account for much of the increase."
A dip in copper earlier on Monday stemmed from profit-taking and a stronger dollar could cap further rises, he added. Gains in the dollar make commodities priced in the U.S. unit more expensive for holders of other currencies. The dollar rose on expectations that U.S. data due this week, such as Tuesday's retail sales, would be strong.
There are also views that this week's euro zone gross domestic product and sentiment figures will further support hopes the bloc is recovering.
Reflecting a less bearish stance on copper, hedge funds and money managers cut their net short positions in copper futures and options in the week to Aug. 6, a report by the U.S. Commodity Futures Trading Commission showed.
CME Group Inc said on Friday the initial trade of its first aluminium Midwest premium futures contract was made earlier this week.
The premium, paid over the LME cash price, on U.S. Midwest aluminum has increased to nearly 9 cents a lb from 4 cents a lb over the past three years, and is now a larger component of the aluminum consumer's cost and risk, the CME said.
Aluminium was one of the strongest metals on the LME on Monday, driven by commodity trading advisors and managed futures funds covering positions.
"The CTAs have been very aggressively selling short for some time now. You tend to see these moves in aluminium when there is short-covering," analyst Gayle Berry at Barclays said.
Aluminium has broken out of a pattern, based on technical signals, and is expected to move higher to about $1,950 a tonne in August, analyst Edward Meir at INTL FCStone said in a note.
Nickel gained 1.3 percent to $14,875 a tonne and zinc rose 0.72 percent to $1,958. Lead added 0.85 percent to $2,198.50 and tin rose 0.29 percent to $22,140.