Copper prices rose in thin trade on Tuesday, supported by a firmer tone in Shanghai futures, as investors focused on strong fundamentals and anticipated an influx of speculative funds into metals.
London Metal Exchange copper for delivery in three months was up $95 or 1.3 percent at $7,370 a tonne. On electronic trading platform Select, the metal had traded between $7,320 and $7,475.
On Monday, copper ended down $45 at $7,275. "For the moment, the recent vulnerability in the metals has been put aside and the combination of a weaker dollar, less forward selling combined with consumer buying, seems to have set the scene for another run-up in prices," BaseMetals.com analyst William Adams said in a daily note.
"Whether the rally can climb to the lofty levels seen in May remains to be seen. Much will depend on whether the long-term funds rejoin the bandwagon and also whether there are further supply disruptions, especially with labour contracts up for renewal at Escondido and in Zambia.
"Given the recent bounce, look for any dips to be well supported and if upward momentum gains traction, then expect consumers to restock just in case prices do return to the highs."
With the start of July and the third quarter, players were waiting for direction to be set by investment funds after the US market holidays, an LME dealer in Tokyo said, putting resistance for copper at $7,600 and support at $7,000.
Copper trading at the Comex division of the New York Mercantile Exchange was closed on Monday and would remain shut on Tuesday for the US Independence Day holiday.
Prices of copper, used in construction and electronics and a barometer for industrial demand, reached a record $8,800 on May 11. Since then, the red metal has fallen 16 percent, but it is still up 67 percent from the end of last year.
On the supply side, Jiangxi Copper Co Ltd, China's largest copper producer, stopped production at one of its four mines after rain damaged an ore-dressing plant, a company official said on Tuesday. Jiangxi's Yongding mine had been closed since July 1 and would resume production on July 15, said the official.
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