Copper hits 10-week high

Copper hit a 10-week high on Monday but erased its gains after a rise in inventories weighed on prices, while nickel tumbled by 5 percent on higher stocks. London-listed miners like Rio Tinto, BHP Billiton, Anglo American and Xstrata all rose between 1-2.5 percent in line with a broder rise in European shares.
Copper for three-month delivery on the London Metal Exchange finished the official session at $8,080 a tonne, down $80 from Friday after touching $8,212, its highest since May 9.
"The stocks dampened the sentiment," an LME trader said. Stocks in LME-warehouses rose by 2,725 tonnes to 101,400, enough for just over two days of global consumption, and are half the level seen at the end of January. "The LME inventories were higher this morning and $8,200 is a bit of a challenging level to get through in the short term," analyst Jon Bergtheil at J.P. Morgan said.
Traders said the market seemed rather bullish on demand from the United States, one of the top consumers of industrial metals. The first report on how the US economy did in the second quarter 2007 is due on Friday and an annual growth rate of 3.2 percent is forecast after just 0.7 percent in the first quarter.
Copper, which hit an all-time high of $8,800 in May last year, rose by nearly 10 percent in July supported by falling LME stocks and strikes at suppliers in Latin America.
Striking subcontract workers at Chile's Codelco copper mine, the world's largest, said they planned to resume protests on Monday after talks to end their four-week stoppage broke down. Codelco is the world's largest copper miner and last year accounted for 11 percent of global production. Nickel lost some 5 percent on Monday after a rise in inventories and reports of producers cutting back nickel usage weighed on prices.
Nickel for three-months delivery on the London Metal Exchange fell as low as $33,275 a tonne and closed at 33,400, down $1,650 from Friday's close. A rise in LME stocks and Friday's rally being overdone was the reason behind the metal's weakness, analyst David Thurtell at BNP Paribas said.
Stocks of nickel, the key ingredient in stainless steel, in LME-registered warehouses rose by 492 tonnes to 11,346 tonnes, currently standing at its highest since June 2006.
The metal touched a six-month low of $31,500 a tonne in early July, loosing more than $20,000 since early May, when it hit an all-time high of $51,800. Lead, which has risen about $800 since the start of July, matched the record high of $3,500 it closed at on Friday before falling back to close at $3,390.
Tin touched its all-time record at $15,700 in early trade but ended the day at $15,325, down $120. Zinc lost $35 to $3,690 while three-months aluminium was down $34 at $2,822.