Copper prices rose overnight on concerns that supply will tighten after a court ruling cast doubt on the future of a smelter in India and a large mine in Indonesia said its export permit had expired.
Better-than-expected Chinese lending data on Friday meanwhile suggested that demand from the world’s biggest consumer of metals will remain strong.
Benchmark copper on the London Metal Exchange (LME) closed 1.4 per cent higher at $US6,275 per tonne, near a two-month high of $US6,289.50 reached on February 7.
Copper stockpiles available to the market in LME-registered warehouses are near 13-year lows and LME time spreads have tightened rapidly, suggesting a shortage of nearby metal. .
But there is little sign of a serious supply shortfall, Deutsche Bank analyst Nick Snowdon said, adding that the outlook for US-China trade negotiations and global economic growth remained the most important drivers of copper prices.
Copper fell to a 1-1/2 year low of $US5,725 in January.
India’s Supreme Court set aside an order by an environmental court that had cleared the way for the reopening of Vedanta’s southern Indian copper smelter.
PT Freeport Indonesia, which operates the Grasberg mine, one of the world’s largest, said its copper concentrate export permit expired on February 15 and it had not received recommendations from the mining ministry that will help it to obtain a new one.
The Malaysian government said it would not extend its moratorium on bauxite mining which ends on March 31 due to strong demand for the ore, state news agency Bernama reported on Monday, quoting the water, land and natural resources minister.
Bauxite is used in the production of aluminium.
The United States and China will resume trade talks next week in Washington DC, but US President Donald Trump repeated on Friday that he may extend a March 1 deadline for a deal.
The US Commerce Department sent a report on Sunday to President Trump that could unleash steep tariffs on imported cars and auto parts.
Speculative investors are betting on lower LME copper prices, with a small net short as of last Thursday, according to brokers Marex Spectron.
Cash copper has flipped to a $US35 premium against the three-month contract from a $US15 discount a week ago, suggesting a shortfall of nearby supply.
On-warrant copper stocks in LME warehouses at 73,850 tonnes are down from about 130,000 tones in January.
One entity holds between 50 and 79 per cent of warrants.
LME aluminium was down 0.2 per cent to $US1,856 a tonne, zinc ended 0.6 per cent lower at $US2,638, nickel rose 0.4 per cent to $US12,455, lead fell 2.3 per cent to $US2,030 and tin finished 0.4 per cent lower at $US21,110.