Copper fell in sympathy with weaker equities on Tuesday, but held above the $5,000 mark and near 7-1/2 month highs following recent stronger economic data. Copper for three-months delivery on the London Metal Exchange ended at $5,050 a tonne against $5,075 on Monday when it surged 5 percent and breached the $5,000 level.
Earlier in the session copper hit $5,145 - its highest since October 15 last year. Equities and industrial metals had rallied on Monday after strong Chinese and US manufacturing data boosted perceptions the global economy may have seen a floor. "As long as macro data remains positive, we're probably going to continue to see stronger metal prices," said Gayle Berry, metals analyst at Barclays Capital in London.
Copper's recent gains mask weakness in fundamentals, as supportive Chinese demand shows signs of tailing off, global economic turmoil persists and markets enter a traditionally quiet trading season. "Everything is tracking equities," said Carl Firman, analyst at Virtual Metals. "There is an overriding sense of optimism...(But) I can't quite grasp the fundamentals." Copper prices have surged more than 60 percent in 2009, largely inspired by a major restocking process in China, the world's top copper consumer.
Tin closed at $14,500 from $14,650 and earlier hit $14,750, its highest since early November. Cancelled warrants of tin - material earmarked for delivery - jumped to 1,495 tonnes from 320 the day before. Tin remains in a strong backwardation of about $225 - a premium for nearby material over the three-month contract - which could point to a brighter outlook for real physical demand.
Aluminium ended at $1,472 from $1,473 as LME inventories hit yet another record, above 4.2 million tonnes. The metal used in transport and packaging has been hammered by the economic downturn's devastating impact on the auto sector.
Nickel closed at $14,620 from $14,650. It earlier hit $14,700, its highest since early October. Stocks, which recently dipped from record highs, fell 120 tonnes to 109,194. Analysts say the metal has also been supported by the significant level of mine production cuts seen so far in 2009. Zinc ended at $1,580 from $1,610. Battery material lead was at $1,659 from $1,655, having earlier hit $1,663 - its highest since early October.