US copper futures rallied 4 percent or 13.15 cents on Tuesday, with stronger equity markets and bullish chart patterns providing the impetus for a short-covering rally that lifted prices to a seven-day high, analysts said.
Copper for December delivery ended 13.15 cents firmer at $3.3875 a lb. on the New York Mercantile Exchange's Comex division, its highest settlement since August 31, after trading a session range between $3.2430 and $3.4110.
The copper market's ability to hold last on Friday's low of $3.2060 sparked an initial wave of short covering that picked up momentum after prices were able to breach the $3.35 level, traders said. Bullish import data from China was seen as another factor behind the on Tuesday rally, analysts said. Chinese imports of unwrought copper and semifinished copper products fell 7.2 percent from July, but were still up almost 43 percent in the first eight months of 2007 compared with year-ago levels.
The markets are therefore looking for much stronger import numbers for September," said Edward Emir, metals analyst with MF Global. Overnight inventory data showed London Metal Exchange copper warehouse stocks fall by 325 tonnes to 137,275 tonnes on Tuesday, while Comex copper stocks were even at 20,692 short tons on Monday. LME copper for delivery in three months ended the day at $7,475 a tonne, up $315 or 4.4 percent from Monday's kerb close.
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