Copper prices climbed overnight, reinforced by lower inventories and robust consumption in top consumer China, though any further rally is likely to require signs of demand recovery in the rest of the world, analysts said.

Benchmark copper on the London Metal Exchange (LME) was up 0.4 per cent at $US5,876 a tonne at 1558 GMT. Prices of the metal used widely in power and construction hit 4-1/2 month highs of $US5,928 a tonne this month.

“Sentiment has improved. Chinese demand for copper is strong, we can see that from the imports and falling inventories,” said BMO analyst Timothy Wood-Dow. “For higher prices we need competition for copper units, and that would come from recovery in the West.”

Stocks of copper in warehouses monitored by the Shanghai Futures Exchange have fallen to 17-month lows of 109,696 tonnes from more than 380,000 tonnes in March.

In LME-registered warehouses, copper stocks stand at 233,400 tonnes, down more than 15 per cent since May 13.

“In the absence of other information, metals markets will be led by inventory movements,” said SP Angel analyst John Meyer.

China’s imports of unwrought copper totalled 436,030 tonnes in May. That was down 5.5 per cent from April but up 20.8 per cent from the same month last year.

Supporting copper was worry about disruption to supplies from top producer Chile.

State-controlled Codelco said it would suspend construction projects in the northern part of the country and try to maintain production at its Chuquicamata mine while staffing the operation with local personnel.

Large holdings of warrants and cash contracts have fuelled worries about nearby supply on the LME market. Cash zinc closed on Friday at a premium to the three-month contract, having been at a discount on Thursday.

Aluminium rose 0.7 per cent to $US1,603 a tonne, zinc added 0.1 per cent to $US2,085, lead slipped 0.4 per cent to $US1,771, tin was little changed at $US16,890 and nickel lost 1 per cent to $US12,645.

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