Copper prices touched two-week highs overnight as better than expected industrial output and investment data from top consumer China boosted sentiment, although gains were capped by the protracted US-China trade dispute.
Benchmark copper on the London Metal Exchange (LME) ended 0.8 per cent up at $US5,983 a tonne.
The metal used widely in the power and construction industries earlier reached $US6,020 – its highest since July 1.
“Copper’s fortunes are very much tied to what is going on with the US-China trade talks and the outlook for Chinese demand and stimulus,” said Citi analyst Oliver Nugent.
“There are some bullish backstories on the micro side, like shortages of concentrate, but on the refined metal side there is nothing substantial enough to displace the macro story.”
China’s June industrial output rose 6.3 per cent from a year earlier.
That beat May’s 5 per cent growth – a 17-year low – and the 5.2 per cent expected by analysts polled by Reuters.
Fixed-asset investments for the first half of the year rose 5.8 per cent from a year earlier, ahead of a consensus forecast of 5.5 per cent.
The numbers suggest an improving outlook, but some analysts say they may not be sustainable and expect Chinese policymakers to provide more economic stimulus in coming months.
“China’s economic data in June was better than expected, but industrial metal markets seemingly were not convinced that this marks a turning point,” Julius Baer analysts said in a note.
“Chinese metals demand is sufficiently solid to support prices but not strong enough to push them higher.”
China accounts for nearly half of global copper consumption estimated at about 24 million tonnes this year.
Negative sentiment is highlighted by data from the US Commodity Futures Trading Commission showing speculators raised net short copper positions on COMEX.
Nickel prices touched $US13,615, their highest since March 7, on worries about supply after major producer Indonesia said it would stick to plans to reimpose an ore export ban from 2022.
Further price support comes from falling stocks in LME-registered warehouses.
At 150,324 tonnes, stocks have halved since May last year .
Three-month nickel was up 1.4 per cent at $US13,660 a tonne by the close.
Aluminium was up 1.1 per cent at $US1,842, zinc gained 0.2 per cent to $US2,444, lead rose 0.2 per cent to $US1,981 and tin retreated 1.6 per cent to $US17,900.