Copper at three-week high

Copper rose to its highest level in more than three weeks on Wednesday due to strong physical and Chinese buying and falling inventories, but traders said worries over economic growth were likely to keep a lid on prices. Copper's rise lifted other industrial metals. Zinc climbed to a nearly eight-week peak, while tin hit its highest since April 30. Battery-material lead saw a two-month high.
Benchmark copper for three-month delivery on the London Metal Exchange closed at $6,850 a tonne from $6,637 on Tuesday. The metal, used in construction and wiring, touched $6,879, its highest since June 28. "There was Chinese buying overnight, which triggered this rise," RBC Capital Markets trader Randy North said. "It then pushed through some stop levels; $6,750 and then $6,800 and it's been technical buying and short-covering after that."
Copper has been stuck in a range of around $6,300 to $6,900 since early June. "You've got this tussle between positive and negative, and as a consequence I see these things trade range bound," said analyst Daniel Brebner at Deutsche Bank.
Reuters' mid-year metals price poll showed copper was expected to average $6,878 a tonne this year from $7,077 a tonne in the January poll. For aluminium the number was an unchanged $2,094 a tonne. Metals did not take any support from the currency markets on Wednesday, where the euro slipped versus the dollar, making dollar-denominated metals more expensive for non-US currency holders. Investors also fretted over data showing China's imports of refined copper fell for a third straight month in June.
Copper stocks fell 1,975 tonnes to 417,625 tonnes, down from near seven-year highs at 555,075 tonnes hit in mid-February. Industry data showed, in the first four months of the year the copper market had moved into a deficit of 67,000 tonnes, from a 74,000 surplus in the same year-ago period. "We expect the firmer tone to continue through the balance of the week, as declining LME stocks, steadier equity markets will all contribute to a steadier tone," MF Global said in a research note.
Aluminium rose to 2,008 versus $1,971. Zinc ended at $1,915 a tonne from $1,875 and tin was last bid at $18,370 from $18,240. Steel-making ingredient nickel climbed to $19,495 a tonne from $19,125, while lead gained to $1,865 from $1,837.