US copper higher

US copper futures ended up 2.5 percent on Monday on a drop in exchange inventories, which rekindled worries about supply, and a decline in the dollar which makes copper more affordable to some consumers.
Copper for March delivery at the Comex division of the New York Mercantile Exchange caught up with gains in London over a long weekend for US metal traders, settling up 7.95 cents at $3.2155 a lb.
It traded at $3.19 on the floor and $3.2750 in overnight ACCESS trade, which was its costliest since November 10. December copper, which goes into delivery this week, was 7.65 higher at $3.1875 a lb, in a $317.10-$325.35 range. Spot November went up 8 cents to $3.1860 a lb.
LME warehouse stocks fell 3,850 tonnes on Monday to 157,725 tonnes. Comex warehouse stocks fell 128 short tons to 28,840 tons on Wednesday, before the exchange closed on Thursday and Friday for Thanksgiving.
"On Friday there was a rather large drop in Shanghai (warehouse) numbers and that also is underpinning the market a little bit," said commodities commentator James Quinn at A.G. Edwards & Sons. "That also is underpinning the market a little bit. I think traders are kind of mixed as far as whether or not China is going to continue to be a big area of copper demand," Quinn continued.
Chinese state-owned trader Minmetals Corp recently said China's refined copper imports could rise to 1 million tonnes in 2007, after destockings from government reserves depressed imports this year. Dovetailing with China's inventory reduction, rising inventories was among the main factors behind copper's recent fall.
LME inventories were up by some 40 percent since mid-October. LME three months copper closed at $7,095 a tonne. That was off from Friday's close at $7,150, but up more than $200 from the pre-US holiday close on Wednesday at $6,900. The dollar tumbled while US traders were away, which makes it cheaper for overseas consumers and investors to buy dollar-priced commodities.
The greenback hit its highest level against the euro since March 2005 on Monday at $1.3172. The weak dollar was a support for copper, said John Hangman, an independent copper trader on the Comex, who added that short covering and other business in London exacerbated the rise.
"A lot of people are starting to look at China is China going to start picking up again," he said. Estimated final Comex copper futures volume was 17,000 contracts, including 3,105 switches.