Copper prices rose for a fifth straight session overnight to their highest since January, supported by firm demand and an improved technical picture.

Benchmark copper on the London Metal Exchange (LME) was up 2.1 per cent to $US5,893 per tonne by 1600 GMT, after touching its loftiest since January 24 at $US5,913.50.

“Copper is being carried higher by an improved fundamental outlook but also by an improved technical picture,” said Saxo Bank analyst Ole Hansen.

The metal broke through the 100- and 200-day moving averages recently, prompting further buying.

The next area of resistance for LME copper lies at $US6,050, Hansen said.

The investment bank raised its copper and aluminium forecasts, and lifted its 12-month commodity returns forecast to 13.1 per cent.

On-warrant LME copper stocks fell to their lowest since February 24 at 130,225 tonnes, while Shanghai Futures Exchange copper inventories were at their lowest since January 17.

Bonded warehouse stockpiles in China were last at 213,000 tonnes, near record lows hit last month.

Analysts and traders say the drawn-down LME stocks are headed for China, where prices are higher.

Chinese domestic spot prices of refined copper rose to 46,350 yuan a tonne, their highest since January 23, indicating strong demand in top consumer China.

“Net positioning on LME copper is on the verge of turning long, with the net short position shrinking from over 40,000 contracts in February to just 895 contracts as of early June,” said BMO analyst Timothy Wood-Dow.

“Any aggressive buying here would have a positive effect on prices.”

The US dollar is trading at its weakest in three months, supporting prices of dollar-denominated commodities.

LME aluminium rose to its highest since March 20, up 1.4 per cent to $US1,628 a tonne, zinc added 0.6 per cent to $US2,028.50, lead shed 1.3 per cent to $US1,742.50, tin gained 1.6 per cent to $US17,200, and nickel rose 0.8 per cent to $US13,010.

Source Article