Copper prices rose on Tuesday, helped by a weaker dollar and concerns over tight supply, as demand for the industrial metal was forecast to get a boost from China's easy monetary policy.
Three-month copper on the London Metal Exchange rose 1% to $9,539 a tonne, as of 0745 GMT. The most-traded January copper contract on the Shanghai Futures Exchange closed up 0.5% at 69,230 yuan ($10,864.89) a tonne.
"Fundamentals remain supportive with low inventory and backwardation in place... Demand, on the other hand, could receive support from scrap tightness and policy easing in China," a Singapore-based copper analyst said.
Copper, widely used in infrastructure projects, is often seen as a gauge of global economic health, with China being its top consumer.
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On-warrant LME-registered stocks were at 80,000 tonnes, down 66% from the August high of 238,725 tonnes. Inventories in Shanghai Futures Exchange warehouses were at 34,580 tonnes last week, their lowest since June 2009.
Supply concerns were recently exacerbated by the suspension of production at MMG Ltd's Las Bambas copper mine in Peru.
"Investors are keenly watching all developments on both supply and demand sides, things are looking supportive amid little hope of inventories getting replenished anytime soon," said ANZ analyst Soni Kumari.
The dollar was slightly lower, weighed by improving market appetite for risk assets and currencies, making the greenback-denominated commodity less expensive for those holding other currencies.
Fundamentals
LME aluminium rose 0.8% to $2,691.5 a tonne, nickel gained 1.2% to $19,570 a tonne, lead edged 0.1% higher to $2,296.5 a tonne and tin was up 0.8% at $38,500 a tonne.
ShFE aluminium fell 0.6% to 19,600 yuan a tonne, nickel fell 0.6% to 144,080 yuan a tonne, zinc slipped 1.3% to 23,490 yuan a tonne, lead edged up 0.4% to 15,560 yuan a tonne and tin rose 0.6% to 284,800 yuan a tonne.
Chile's mining sector is bracing for tighter environmental rules ahead after President-elect Gabriel Boric pledged to oppose a controversial $2.5 billion iron-copper mine that was approved in August after years of legal wrangling.
"Election of new (Chile) president is raising risk for delay in investments by companies, though it would not have near-term impact," ANZ's Kumari said.
For the first nine months of the year, the copper market was in a 161,000 tonne deficit compared with a 239,000 tonne deficit in the same period a year earlier, the International Copper Study Group said.
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