Shanghai copper climbed 2 percent on Friday, after a 1.8 percent rally in London copper on the back of a statement by the US Federal Reserve on interest rates. Shanghai Futures Exchange June copper rose 1,230 yuan to 62,240 yuan ($8,058) a tonne at the close, from 61,010 yuan, last traded on Thursday.
"Chinese end-users of copper will increase their purchase of the metal soon," analyst Wu Peng at Jinrui Futures, said. "As a result, Shanghai copper will closely follow London, which I expect to hit $7,000 a tonne in April," he said.
Rising copper consumption in China, the world's top metal market, could support an uptrend in prices, once consumers digest the 50 percent rise in Shanghai stocks seen since mid-February.
Copper inventories monitored by the Shanghai Futures Exchange rose by a less-than-expected 143 tonnes to 56,252 tonnes. Traders earlier said a rise 1,000 tonnes was on the cards. They noted that the pace of deliveries is slowing, suggesting increased buying in the spot market. Cash copper in eastern China was up 650 yuan to between 60,900 yuan and 61,150 yuan a tonne.
China's refined copper net imports in February 2007 came in at an all-time high around 147,700 tonnes. London Metal Exchange copper for three-month delivery gained $40 at $6,770 a tonne at 0708 GMT after a 1.8 percent jump in the previous session. "Copper has taken back its place back as the bellwether for the complex, at least for now. The comments by the Fed are improving sentiment and we are quite bullish on prices across most metals," analyst Joel Crane at Deutsche Bank, said.
Prices were also aided by falling stocks of copper in LME registered warehouses, which dropped 1,525 tonnes to 187,775 - less than four days of world consumption. Stocks are down 13 percent since late February.