Publications
Partners
London - Copper rose to a 20-month high on Monday due to a stronger euro and investment demand and to robust import figures from China, the world's top consumer of the metal.
But copper partially pared gains, after the dollar erased some of its losses versus the euro, as comments from a German official injected some uncertainty on the rescue package for Greece that eurozone finance ministers agreed on over the weekend.
A weaker dollar makes commodities denominated in the US unit cheaper for holders of other currencies.
Aluminium rallied to its highest in 18 months, after UC RUSAL, the world's biggest producer of the metal, reported robust earnings and unveiled plans to launch a physically backed exchange traded fund (ETF).
Copper for three-months delivery on the London Metal Exchange rose to $8 043.75 a tonne, its highest since August 1, 2008 and was untraded in the open outcry trade, but quoted at $7 949/7,950 a tonne, versus Friday's last bid of $7 920.
"To some extent, this has never been a fundamental story, it's been the weight of money," said Robin Bhar, analyst at Credit Agricole.
"I just got back from CESCO copper conference in Chile and everybody was bullish...When it comes to copper, it's a balanced market, moving into deficit and it's the China story again."
China's strong demand for copper showed no let-up in March, with imports rising rapidly despite higher prices as factories returned to work in earnest after the long Lunar New Year holidays.
Imports of unwrought and semi-finished copper surged 41.6% on the month, surpassing estimates by traders and analysts for the second straight month and reflecting strong term and financing inflows to the country.
To read a Metals Insider column on China's copper imports, click on:
"The euro/dollar had a bit of a knock-on impact on copper," said a trader on the floor of the LME, "It's all about the close this evening - if it manages to stay above $8 000 a tonne, then we're still bullish for the coming days," he said.
The price of copper, used extensively in construction and wiring, has gained around 8% since the start of the year, and is trading around 10% below its all-time high of $8 940 a tonne, struck in July 2008.
ETF boost
Potential investor interest drove aluminium higher, after news on RUSAL's possible launch of an aluminium ETF, comprising one million tonnes of metal or more.
"That's pretty bullish news," Bhar said. "It will appeal to the investors. These (ETFs) are low-cost ways to getting exposure," he said.
Three-month prices have rallied to $2 431 a tonne, their highest since October 1, 2008. The power-intensive metal was last at $2 415 a tonne, versus Friday's $2 406 a tonne.
"By all accounts, the market's running in a surplus of at least 2 million tonnes, so if you could put half of that surplus locked away in an ETF, I'd think that has to be positive for prices," he said.
Zinc was unchanged at $2 415 a tonne. Tin eased $15 to $18 725 a tonne, while lead was at $2 342 a tonne from $2 330.
Nickel rose to $25 650 a tonne from Friday's $25 200. BHP Billiton has suspended operations at part of its Nickel West mining complex in west Australia after a miner died in an accident there at the weekend.
- Reuters
