Shanghai Futures Exchange (ShFE) copper traded up 1.5 percent at 38,090 yuan ($5,847) a tonne on Monday, having pared earlier gains of more than 3 percent. Shanghai nickel held 3 percent gains. ShFE copper's chart picture has improved with prices breaking through the 200-day moving average.
In China, sentiment improved as investors reacted positively to statements from top Chinese leaders at the annual parliament session over the weekend. "Market sentiment in China towards metals has improved - the question is, why? Is it just seasonal positioning ahead of peak demand in two Q or is there some underlying improvement in demand?" said UBS analyst Lachlan Shaw in Melbourne. "We're in a bit of a data blind spot at the moment but that will be resolved (on Saturday) so we'll have a better idea soon."
The first reading for China's industrial output this year is due at the weekend. Output is expected to increase by 5.6 percent for January and February, down from a 5.9 percent expansion in December. As China's policy meet gets underway, its economy isn't headed for a hard landing and isn't dragging on the global economy, although uncertainty and instability in the global economy do pose a risk to growth.
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