Shanghai copper futures gained ground on Monday as metal markets received a boost from a weaker US dollar and warehouse stocks hitting multi-year lows at home and abroad, traders said.
Shanghai's most active contract, November, climbed 280 yuan to 26,020 yuan ($3,143) a tonne, with other contracts gaining between 100 yuan and 510 yuan. Combined volume fell to 183,572 lots from Friday's active 292,552 lots.
"The Shanghai market was inspired by a healthy rise in London, but its climb was somewhat capped by some short selling," said a trader in Shanghai.
But dwindling warehouse stocks in Shanghai and London are expected to support metal prices in the short term, traders said. LME copper warehouse stocks have fallen to at least 14-year lows as of late last week.
LME's copper stocks fell by another 850 tonnes to 87,600 tonnes on Monday. In China, Shanghai's copper warehouse stocks fell 17,614 tonnes to 43,865 tonnes the lowest level since April 1998 for the week ended on Thursday.
The three-month copper contract on the London Metal Exchange traded at $2,831/$2,838 a tonne on Monday's Asian trade after gaining $30 to end on Friday's kerb at $2,816, partly due to a softer US dollar, traders said.
The dollar lost some of its strength to be quoted against 111 yen on Monday due to lower-than-expected US economic growth in the second quarter and security concerns. Spot copper in Shanghai was up by 150 yuan to move in a range of 28,050-28,200 yuan a tonne on Monday.
Shanghai aluminium contracts reversed copper's trend to fall between 20 yuan and 150 yuan, with volume inching down to 24,332 lots from Friday's 24,484 lots. LME aluminium was quoted at $1,691/$1,694 on Monday's Asian trade from Friday's close of $1,696 a tonne.
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