LONDON: Copper prices rose to their highest level in more than a week on Tuesday as the dollar slipped and talk of further fiscal stimulus by top consumer China fuelled buying of commodities.
Benchmark copper on the London Metal Exchange was up 2.2 percent at $4,740 a tonne at 1103 GMT from an earlier $4,743, its highest since October 13.
The higher US currency, close to a 9-month high against a basket of currencies, makes dollar-denominated metals cheaper for non-US firms; a relationship used by funds to generate buy and sell signals.
China accounts for nearly half of global copper demand, estimated at around 22 million tonnes. Fiscal and monetary stimulus in the country has boosted investment and demand for base metals and supported prices this year.
"There's some talk of fiscal stimulus in China, but there's nothing concrete, it's more anecdotal. There is scope for stimulus given the neutral numbers last week," Julius Baer analyst Carsten Menke said.
"There has been a jump in commodity prices, this usually happens when there is a pick up in speculative interest."
Stronger surveys of manufacturing in the United States and Europe has also helped to boost sentiment.
Traders said copper's break of resistance around $4,739 near the 200-day moving average could see an attempt at $4,753, the 21-day moving average.
But the market still expects a copper market surplus, which will limit any attempts to push the price higher.
Among other metals, zinc was up 2.5 percent at $2,370 from an earlier three-week high of $2,374. It is up nearly 60 percent from January lows on worries about shortages.
"Zinc surpluses have fallen consistently since 2009, a trend we believe will continue, given a lack of mine supply growth," Bank of America Merrill Lynch analyst Michael Widmer said.
"Falling mine supply growth will boost China's refined zinc imports and reduce concentrate purchases/domestic refined supply. We anticipate deficits in 2015 and 2016."
China's imports of refined zinc at 350,500 tonnes between January and September this year, up more than 14 percent from the same period last year.
Aluminium was up two percent at $1,663 a tonne, lead gained 2.2 percent to $2,069, nickel rose 3.2 percent to $10,320 a tonne and tin added 1.3 percent to $20,245.
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