Chinese rebar steel futures surged as much as 7 percent to their highest in more than four years on expectations of reduced supply in the winter due to Beijing-imposed capacity curbs.
"It's a combination of (positive) sentiment around China that coincides with a realisation that the copper market balance has been on a knife edge for the last year. Disruptions on the supply side have left limited room for error," said Paul Gait, an analyst at Bernstein.
"Admittedly steel and iron ore price gains are more to do with capacity curtailment but its capacity curtailment in the context of China looking to ensure a healthy price for its industrial commodities. We have a pro growth, pro inflation policy in Beijing and that has implications for copper."
FUNDAMENTALS
COPPER PRICE: London Metal Exchange copper traded down 0.1 percent in official midday rings at $6,365 a tonne, having earlier jumped to $6,430.50, its highest since May 2015. Volumes were more than double usual levels at over 9,000 lots.
CHINA CAPACITY CUTS: China earlier this year ordered steel and aluminium producers in 28 cities to slash output during winter as it fights smog. Last week, the key steel producing area of Tangshan and other parts of Hebei province said they will implement the order.
ALUMINIUM PRICE: Aluminium was last bid up 1.5 percent in rings at $1,939 a tonne, while in Shanghai, prices hit their highest since January 2013 on prospects for shutdowns in top producer China.
NICKEL PRICES: Stainless steelmaking ingredient nickel traded up 1 percent in rings at $10,355, chasing surging steel prices in China, though gains were capped by still high levels of inventory.
WIDER MARKETS: The dollar dipped, making dollar priced metals cheaper for non-US investors, while world stocks, seen as a proxy for growth, breached new records on better-than-expected company earnings and strong US jobs data.
COPPER SPECS: Hedge funds and money managers boosted their net long position in COMEX copper to a record high in the week to Aug. 1, US Commodity Futures Trading Commission data showed on Friday.
TIN EXPORTS: Indonesia, the world's largest tin exporter, shipped out 6,205.87 tonnes of refined tin in July, data showed, a jump of 87 percent from the same month a year earlier.