US copper futures climbed to their highest level since mid-November in morning business on Tuesday, with broader sector strength underpinning the industrial metal's early advance, traders said.
"I think copper is just seeing sector strength right now from a general buy into all things commodity today," said Zachary Oxman, senior trader with Wisdom Financial in Newport Beach, California, referring to the re-balancing of commodity indexes. "It just looks like a big buy across the board in commodities. I think gold will hold, but I don't see copper holding."
Copper for March delivery was trading up 9.90 cents, or 3.15 percent, to $3.24 a lb by 10:33 am EST (1533 GMT) on the New York Mercantile Exchange's COMEX division, easing back from an earlier session peak of $3.2750, its highest since November 15.
Volumes were estimated at 11,082 lots by 10:00 am. The re-balancing of indexes involves selling assets that have registered healthy gains, and buying those that have underperformed.
Despite copper's early burst higher, ever-present concerns in the market that a global economic slowdown will impact future demand growth will likely keep the industrial metal on the defensive, longer-term. A firmer tone in both Asian and London copper markets overnight fed into the early strength in New York, traders said.
Copper gained more than 1 percent in Shanghai and London on Tuesday, buoyed by tightness in the world's biggest consumer, China, but spot premiums in China are easing, which in turn may undermine futures markets.