Base metals prices ended the rings higher in London Metal Exchange business on Monday, and although afternoon trading was quieter after earlier advances, scope remained for further gains, traders said.
"Overall, we had a steadier tone as Asia started the ball rolling with some short-covering after an easier London close on Friday," a trader said.
"That short-covering continued in early London trading, particularly copper, although a softening of the spread capped the market a bit. Lead had a bit of speculative demand, while there was some trade buying in tin, and zinc appeared to have shrugged off the settlement of the Tara zinc mine dispute."
Copper stalled around intra-day highs near the $2,775/2,780 resistance band at midday, and although prices remained substantially higher this set the tone for mostly flat trade in the rest of the market, traders said.
Analysts said that the market had recovered some poise, following sell-offs last week when investment funds exerted pressure. Inventory declines for all the primary metals also injected an undercurrent of support.
Copper built on Friday evening's late clearance of $2,700 a tonne, repeatedly testing resistance around $2,775 before ending the kerb at that figure and up $77 from Friday's kerb close.
Copper stocks fell 2,125 tonnes and now stand at just 126,075 tonnes. The low inventory level was reflected in nearby tightness, with the cash/threes backwardation widening to $45/55 from Friday's levels around $40.
Above $2,775, the next chart target is $2,835/2,840, although there is likely to be intermediate resistance around $2,800, traders added.
Aluminium ended at $1,684 from $1,662, and with inventories down 9,775 tonnes the market looked set for further short-term gains.
Zinc concluded the rings at $1,105, up $23. Lead rose $35 to $852.
Nickel rose $400 to $12,200, while tin was $225 higher at $9,325.