Copper closed higher on the London Metal Exchange (LME) on Monday as the previous week's fund selling dried out. "There has been some fund selling around in the market during the last couple of days, but I think it is now coming to an end," an LME trader said.
Copper dropped by over 12 percent last week, but the direction of the market remained uncertain with the metals trading in ranges. "You trade small, keep it close to your chest and don't hold it for too long," he added.
Three-month copper closed at $7,160 per tonne against Friday's kerb close of $7,035. Dealers believed copper would remain within its range between $6,600-$8,200.
Workers at Chile's Escondida, the world's biggest copper mine, said on Monday it submitted a final contract offer to union workers and would request mediation from government authorities to extend talks.
"The unions are playing it very, very tough, They are not being flexible at all. Other mine workers are waiting to see what happens at Escondida. This could set a benchmark for other negotiations," a second trader said. UBS analyst Robin Bhar noted that in addition to Escondida, pay talks were continuing at the Antamina facility in Peru.
Nickel stabilised after sharp falls last week as critically low stocks fell again on Monday to 5,488 tonnes. With cancelled warrants, or stocks earmarked for delivery, at 3,678 tonnes, just 1,770 tonnes are available. Global nickel demand runs at around 3,500 tonnes per day. Nickel closed at $24,150 versus $23,600 and the cash/threes spread was a wide $2,800 backwardation.
The stainless steel sector accounts for two-thirds of global nickel off take and producers are said to have underestimated demand from stainless mills.
"We're seeing the consumers coming back with a vengeance and the steel mills have been slow to catch up," minerals strategist Angus MacMillan at Bache Financial said.
Aluminium was up $50 to $2,500 at the kerb close. Zinc ended $30 higher at $3,110. Lead and tin were untraded in the kerb. Lead was last quoted at $1,045/1,050 against $1,048 and tin was at $7,975/7,980 versus $7,850/7,900.