Copper rebounds on industrial buying; speculators on sidelines

LONDON: Copper prices recovered on Tuesday as industrial buyers scooped up the material, but speculators remained cautious after top metals consumer China warned it would dampen high commodity prices.

Three-month copper on the London Metal Exchange had gained 0.6% to $8,914 a tonne by 0930 GMT, after shedding 0.7% on Monday.

The most-traded May copper contract on the Shanghai Futures Exchange closed down 0.3% at 65,870 yuan ($10,055.72) a tonne.

LME copper has been trapped in a range below its 9-1/2 year peak of $9,617 a tonne touched in late February.

"The second quarter is seasonally strong across the board, with northern hemisphere peak season demand coming through and the construction season in China in full swing," said independent consultant Robin Bhar.

"I think the trade is short and will look to buy and support the dips, but the speculators have really curbed their enthusiasm because of what China has threatened to do."

Surging prices of global commodities has led top Chinese officials to emphasise the need to cap prices to reduce costs for firms and control inflation.

Also supporting the market was data on Tuesday showing China's January-March copper imports climbed to the highest first-quarter levels since at least 2008, on rising demand and easing logistics issues.

"I think this is a dip to buy, anything between here and $8,800 is worth picking up," said a Singapore-based metals trader.

Copper inventories in LME-approved warehouses have more than doubled since early March to 168,500 tonnes, their highest since Nov. 9, while stockpiles in warehouses tracked by ShFE have been hovering around their 11-month high.

LME aluminium rose 1.1% to $2,287 a tonne, nickel climbed 0.6% to $16,230, zinc edged up 0.2% to $2,764, lead added 0.3% to $1,982 and tin advanced 0.2% to $25,610.