Copper rebounded on Monday from a two-week low as investors shrugged off weak trade data from top metals consumer China and bet that demand would increase there after a public holiday. Also contributing to gains was a jump in Chinese banking shares on expectations Beijing will grant more brokerage licences, forcing some copper shorts to cover, traders said.
"We would expect to see a rally over the next few weeks as we start to get data showing that things are not as dire as people had feared," said Caroline Bain, senior commodities economist at consultancy Capital Economics. "Negative sentiment for copper was overdone. Certainly, I think over the next few weeks we will see a pick-up in physical demand for copper in China."
Three-month copper on the London Metal Exchange ended up 2.2 percent to $5,870 a tonne after slipping to $5,714, its weakest since February 24. Prices shed 1.5 percent on Friday. While China's imports of commodities eased again in February, sparking a negative reaction in Asian trade, analysts said the data was distorted by the late Lunar New Year holiday, which took a bite out of shipping volumes.
Copper imports in February slowed by nearly a third from January and were down more than a quarter from a year earlier. In wider markets, US equities rose while the dollar fell from multi-year highs as investors took profits from last week's payrolls inspired gains. The moves boosted copper. A weaker dollar makes dollar-priced metals cheaper for non-US investors, while equities are seen by some investors as a proxy for growth.
Elsewhere, data showing hedge funds and money managers switched to a net long copper position in the week to March 3 on the US Comex market also boosted sentiment. Copper gained support from news that output at the Pelambres mine of Chilean copper miner Antofagasta Plc has been reduced by about 5,000 tonnes in the past week because of protests by villagers in the area.
In other metals, nickel added 1.1 percent to end at $14,525 a tonne, having earlier hit its highest since mid-February at $14,675; while aluminium ended down 0.1 percent to $1,780, having earlier hit its lowest since mid-January at $1,767. Alcoa Inc agreed to pay $1.3 billion to acquire titanium supplier RTI International Metals Inc, the metals company's latest investment in more profitable products for the aerospace and automotive industries. Tin ended down 0.6 percent to $18,200, zinc ended up 1.1 percent at $2,042 and lead closed up 1 percent at $1,838, having earlier hit its highest since mid-February at $1,841.
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