Copper surges to $5,000/tonne on China demand

Nickel price highest since Oct, zinc hits 13-month high

Copper surged through $5,000 a tonne on Wednesday to its highest since late April as its imports to top consumer China remained solid in June and as investors bet Beijing will stimulate its economy further.

China's copper imports dipped 2.3 per cent in June to 420,000 tonnes from a month earlier, data showed, still brisk in line with increasing demand from the power sector.

"China ... has a lot of refined copper production and it's still able to accept such relatively solid imports. That reflects good and improving demand," said Helen Lau, analyst at Argonaut Securities in Hong Kong.

Chinese stocks and commodity futures closed higher on bets of further stimulus, while global stocks rallied on the prospect of solid US growth.

London Metal Exchange copper jumped as high as $5,032 a tonne, its strongest since April 29, before trading at $4,942 in official open outcry activity, up 1.5 per cent.

Yet LME copper stocks are the highest since February, up by half since early June alone.

"The market is definitely taking a glass half full approach and it's probably a bit premature, given concerns over China's growth and the questions over rising inventories," said Daniel Hynes of ANZ in Sydney.

Nickel hit $10,670, its highest since October, before profit-taking drove prices down 1.6 per cent to $10,320 in official rings.

The stainless steelmaking ingredient has been buoyed by a mining crackdown in the Philippines, the largest supplier of nickel ore to China.

"When you've got an industry that's operating as far below the cash cost as nickel, that's unsustainable, so as soon as there's any supply uncertainty you get this kind of price move," said Bernstein analyst Paul Gait.

Experts, however, told Reuters that the Philippine crackdown is likely to have only a muted impact on exports to China in the short term because the biggest mines have met environmental guidelines.

Zinc marked a new 13-month top and aluminium hit its loftiest in nearly a year before both metals retreated. Zinc, untraded in rings, was bid down 0.1 per cent at $2,190 and aluminium traded 0.3 per cent firmer at $1,681.

The metal used to galvanise steel has been boosted by prospects that Chinese steel makers will rush to raise output before a government mandated shutdown.

LME zinc 'on-warrant' or available inventories are down at 418,300 tonnes, but remain up 21 per cent since June 10.

Tin dipped 0.1 per cent to trade at $17,950 in official rings while lead was bid down 0.1 per cent at $1,866 after hitting $1,892, the strongest since early March.