US copper futures ended higher in a pre-holiday-shortened Monday session, with prices extending a bounce from last week's slide to a nine-month low, as signs of increased Chinese demand bolstered the buying in New York, analysts said.
The COMEX copper futures market will remain closed on Tuesday for the Christmas holiday. The market will reopen on Wednesday for normal trading hours. Copper for March delivery closed up 5.60 cents to $3.1535 a lb on the New York Mercantile Exchange's COMEX division, after dealing between $3.11 and $3.2050, its highest mark since December 3.
Since sinking to a low of $2.8530 last week, the benchmark March futures contract is up more than 12 percent, with signals of stronger demand from China, the world's leading copper consumer, supporting the price surge.
"I think the Chinese probably moved to pretty much a hand-to-mouth purchasing pattern on the decline, but were attracted by some of the lower prices prevailing and need to maybe rebuild some of their inventories, having let them fall, that it is making for a rather tight situation in China, and that's going to be a key driver," said Steve Platt, metals analyst with Archer Financial Services in Chicago.
By 11 am EST (1600 GMT), futures volumes were estimated at 4,997 lots. Conditions were light due to thinly-staffed trading desks. Another strong overnight session in Shanghai, where futures rose by their daily limit for a third day in a row, set the tone for the day, while Chinese import data added upside support.
Chinese imports of refined copper totalled 103,410 tonnes during the month of November, up 5 percent from October but still slightly below traders' expectations. The data indicated that the country's spot market will continue to tighten.
"Refined copper imports in January are expected to rise remarkably on domestic demand," said analyst Shen Haihua at Maike Futures, noting that he forecast December import levels to be line with November or slightly higher.
In trade data released after the close on Friday, speculators expanded their net short, or bearish, position in US copper by 13 percent during the week of December 18. Weekly numbers released by the US Commodity Futures Trading Commission showed that non-commercial investors were net short on 9,044 contracts of copper from 7,992 lots a week earlier.
The London Metal Exchange (LME) will remain closed until December 27, due to the Christmas holiday. On Friday, copper for delivery in three months rose $265 to $6,795 a tonne. LME inventory levels fell 100 tonnes to 198,225 tonnes on Monday, while COMEX copper stocks eased 69 to 15,115 short tons on Friday.