An employee works with a reel of copper cable at a factory in China.ALY SONG
Copper prices ended up on Monday, buoyed by a weaker U.S. dollar and unexpectedly strong Chinese import data that pointed to a brighter outlook for metals demand in the new year.
Benchmark copper for March delivery on the New York Mercantile Exchange's Comex division ended up 4.05 cents (U.S.) at $3.4410 a pound, after dealing in a session range from $3.4130 to $3.5040.
On the London Metal Exchange, benchmark copper for three-month delivery ended at $7,567.50 a tonne from $7,465 at the close on Friday and compared with a session high at $7,705.
"The numbers are pretty spectacular," said Alex Heath, head of base metals at RBC Capital Markets. "If China continues to buy at the rate it's doing, Europe and U.S. consumers will be paying more than they bargained for."
Customs data showed inbound shipments of the red metal into China, the world's top consumer, rose by 27 per cent to 369,368 tonnes in December, as government stockpiling continued and arbitrage opportunities reappeared between LME and Shanghai prices.
In addition, China's overall exports surged 17.7 per cent year-on-year in December against a forecast of 4 per cent.
Offering extra support, the dollar fell broadly in the wake of disappointing U.S. jobs data on Friday, making dollar-priced metals less expensive for holders of other currencies.
On the downside however, fundamentals outside of China remain weak. LME copper stocks continue to rise, with the latest data showing inventories rose 4,575 tonnes to total 515,200 tonnes - their highest level since March.
Also, Chile's state mining company Codelco told Reuters on Saturday that the firm's output should hit a record high this year.
Moreover, Chile's Mining Minister Santiago Gonzalez told Reuters in an exclusive interview on Monday global copper prices could see an "important" downward correction as high metal inventories continue to climb.
Aluminum surged after the power operator in China's Henan province warned local smelters that its power supplies may fall due to power shortages.
Aluminum ended at $2,330 versus $2,280. LME stocks in the metal used in transport and packaging fell 5,500 tonnes, but remain near record levels above 4.6 million tonnes.
On the plus side, recent rises in cancelled warrants - material earmarked for delivery out of warehouses - indicate demand might be picking up. On Friday, cancelled warrants were at 246,650 tonnes from 212,200 tonnes the previous day.
"It coincides with some clear evidence of an improvement in physical markets," said Gayle Berry, an analyst at Barclays Capital. "Most of the increases were in the U.S."
Bucking the trend, steel making ingredient nickel ended down slightly at $17,890 from $17,925 while battery material lead finished flat at $2,532.
Nickel inventories climbed 810 tonnes to record levels at 159,792 tonnes, while mining giant Vale SA said it will restart its Sudbury, Ont., smelter by the end of January.
Zinc ended at $2,573 a tonne from $2,521 and tin ended at $17,900 from $17,340. Tin, used in electrical solder, earlier hit $18,035, its highest level since September, 2008.
LME zinc stocks gained 575 tonnes to 491,325 tonnes to touch their highest level since October, 2005.