Shanghai Futures Exchange copper gained 2.1 percent to close at 45,120 yuan ($6,542) a tonne on Monday amid prospects for better demand in top consumer China and smaller growth in supply. In the physical market, copper premium in Shanghai stayed firm at $95 a tonne, up from $70 a month ago. In Shanghai, aluminium surged 4 percent to 14,090 yuan a tonne, due partly to rising prices of coal, a key input material, and after new Chinese regulations over truck loads disrupted transit.
However, premium for metal to be shipped to Shanghai fell by $15 to $80 a tonne last week, suggesting some traders have become reluctant to source metal from overseas. Chinese investors whose rush into copper hauled it to 17-month highs this month say infrastructure spending and government reforms will keep the metal well supported for the rest of this year and into 2017. The likelihood of rising US interest rates, better-than-expected Chinese consumption this year and smaller growth in copper mine supply for 2017 improved the consensus outlook for copper, said ANZ analyst Daniel Hynes. "Looking at copper technicals, it's looking overbought, but when you place it against the metals complex, it looks like it can go higher," he added.
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