Shanghai copper rises

Copper prices reversed early losses on Monday, focusing on a more positive technical outlook, with some in the market viewing China's reserve ratio hike as a step closer to the end of the monetary tightening cycle. Shanghai's most-active June copper futures contract rose 210 yuan to 71,040 yuan a tonne, after ending last week down 3.5 percent, its biggest weekly drop in a month.
Shanghai copper traded at a discount of 1,126 yuan versus the benchmark LME contract, counting for China's 17 percent VAT. "Each time China raises rates, the market reacts less and less," said a trader in Hong Kong. "The level of inflation is still of great concern, but each increase in interest rates and ratios takes us closer to the end of the tightening cycle." Aluminium rose $13 to $2,703 a tonne. Zinc fell $3 to $2,395. Technically, the upside for zinc may be capped in the near term, said chartist Daryl Guppy of Guppytraders.com.