Shanghai copper futures rose marginally on Thursday as London copper prices climbed, but investors' enthusiasm was dampened by high prices and sluggish domestic demand. Front-month futures prices in Shanghai came within 5 percent of their early May peak, while low inventory levels helped benchmark London Metal Exchange futures trade within a few dollars of last month's $3,435 a tonne historic peak.
"Shorts are heavy in Shanghai, but it's really hard to be successfully short in London. Prices are bound to come down but no-one knows when or by how much," said a trader with a Chinese firm active in both markets.
In Shanghai, most-active September futures closed at 33,420 yuan ($4,038) a tonne, up 80 a tonne from Wednesday's close. August closed up 10 yuan at 34,330 yuan a tonne.
LME copper futures rose to $3,427.50 a tonne at 0700 GMT, up $30 a tonne or nearly 1 percent from the close of Shanghai trade on Wednesday. Shanghai aluminium futures fell on Thursday. Most-active September futures closed at 16,580 yuan a tonne, down 10 yuan from Wednesday's close, while October fell 40 yuan to 16,570 yuan a tonne. Volume fell to 7,858 lots from 11,128 lots.
LME aluminium futures rose to $1,847 a tonne at 0700 GMT, up $15 a tonne from the close of Shanghai markets on Wednesday.
An expected tax change would end the tax-free tolling and processing of aluminium by Chinese smelters, which would limit supplies of aluminium in international markets. The announcement of the new policy is expected this month.