Funds push copper higher

Copper climbed steadily on Tuesday to close London Metal Exchange (LME) open outcry trade nearly one percent higher, just off an earlier record traded high of $3,662 a tonne on light fund buying, traders said.
"Prices have been marked up by the funds looking to spark some panic buying, but to my mind there isn't any mileage taking on positions here, long or short, as the market could go either way," one floor trader said.
Copper peaked at $3,662 a tonne on LME Select before settling back to $3,660 by the end of open outcry trade, up $29 from Monday.
"People are very nervous. The price has scared off a lot of investors," a second trader said.
"Many want to go short but are afraid to do so after getting burned so many times before."
"The low volumes are very worrying. Activity usually slows down this time of year, but it's frightening how little we've seen even with copper at new highs," he added.
Copper futures have hit fresh highs regularly since late July on speculative buying fuelled by supply disruptions due to labour disputes and critically low stocks.
Overnight more than 1,000 workers at Mexican copper giant Grupo Mexico took part in staggered work stoppages in sympathy with strikers at Asarco, a subsidiary of Grupo Mexico.
In a daily report Barclays Capital analyst Ingrid Sternby said that a 27.7 percent year-on-year rise in Chinese fixed asset investment in July could provoke the authorities to implement a further tightening of credit conditions.
"While this (data) points at a very strong current situation for commodities demand in China, it potentially also leaves the demand outlook increasingly vulnerable," she said.
But she added that while Chinese demand was a major element supporting metal prices and credit control could panic investors to liquidate, the downside price risk was limited due to low stocks and insufficient production growth.
In other metals, aluminium was $1,938.00 from $1,928.50, zinc reversed earlier losses to close at $1,343 from $1,321. However lead slipped to $862 from $880, while nickel saw no business, indicated at $15,250/350 at 1610 GMT, versus $15,350. Tin was down $125 at $6,975.