MELBOURNE: Shanghai copper was stuck near two-month lows on Monday, with the dollar pushed up after comments by the Federal Reserve left the door open to a rate hike this year, while a holiday in London drained the market of direction.
The Fed is getting closer to raising interest rates again, the head of the U.S. central bank, Janet Yellen, and other policymakers said on Friday.
"The volatility seen post the Yellen speech is likely to continue this week as the market digests her comments amidst conflicting fundamentals," ANZ said in a note.
Shanghai Futures Exchange copper was trading up 0.2 percent at 36,420 yuan ($5,456) a tonne by 0705 GMT. Prices last week hit two-month lows at 36,050 yuan.
The LME is closed for a public holiday and will reopen on Tuesday.
Global copper stockpiles outside China are expected to rise for the remainder of the year, as China's imports slow and its exports stay robust, Standard Chartered said in a note.
China will need to import 290,000 tonnes of copper a month to avert a rising global surplus.
"Current signals suggest no imminent pick-up in imports. The import arbitrage window has been firmly shut since mid-June, bonded stocks have been unchanged (at 620,000 tonnes) since May and premia remain soft," it said in a report.
"Copper prices and LME spreads are likely to remain pressured in this environment."
In brighter news for demand, profits earned by China's industrial firms grew at their fastest pace in four months in July, aided by a pick-up in sales and reduced costs, the statistics bureau said on Saturday.
U.S. economic growth was slightly more tepid than initially thought in the second quarter as businesses aggressively ran down inventories, offsetting a spurt in consumer spending.
Hedge funds and money managers switched back to a net short position in COMEX copper futures and options in the week to Aug. 23, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
In other metals, ShFE zinc and ShFE tin both held gains of around half a percent, in the slipstream of fresh 15- and 18-month peaks hit in London's Friday session respectively, as speculators bid up metals with supply concerns.
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