Copper rose on Monday as improving western world demand outweighed concerns over how sovereign debt in countries such as Greece might impact the pace of economic recovery. Benchmark copper for three-month delivery on the London Metal Exchange ended at $6,870 a tonne from $6,810 at the close on Friday and compared with a session high at $6,900.
"There are still macro-economic concerns but they seem to have taken a back seat. There are signs of improving demand outside China...that's leading to buying interest," said Gayle Berry, analyst at Barclays Capital. Boosting demand sentiment, Japan's economy expanded at the fastest pace in two quarters, and more than expected, in October-December as an export recovery spurred capital spending.
Trading was lean in Asia, however, due to the Lunar New Year holiday in China, Hong Kong, Singapore, Taiwan and South Korea. US markets were also closed for Presidents' Day.
On the LME's Select electronic trading system, volumes for the three-month copper contract were at 2,743 lots at 1521 GMT, compared with Friday's total of 13,644 lots. In addition, trade was still caution ahead of a two day meeting of Eurogroup ministers on Monday and Tuesday, with few expectations the meetings will yield specific measures to bail out debt-laden Greece.
"This finance ministers meeting could prove disappointing again, so I wouldn't hold my breath," said Robin Bhar, an analyst at Credit Agricole Corporate & Investment Bank.
Latest LME data showed copper stocks rose 1,350 tonnes to 549,125 tonnes, their highest since October 2003. But against that, cancelled warrants - material booked and set to leave warehouses - climbed to 16,625 tonnes against 11,639 tonnes. "Cancelled warrants have been rising, inventory builds have been slowing, physical premiums are picking up, demand for metals is growing on a global basis," said Barclays Capital's Berry.
Aluminium ended at $2,054 a tonne from $2,055 on Friday. LME stocks of the metal used in transport and packaging fell 5,775 tonnes to 4.55 million tonnes while cancelled warrants rose to 273,400 from 264,725, possibly indicating improving demand from the US auto industry, analysts say.
"Right now the (aluminium) cancelled warrants are at the highest level ever," Eugen Weinberg, an analyst at Commerzbank said. Steel-making ingredient nickel finished at $19,350 a tonne from $18,550 while battery material lead was last bid at $2,180 from $2,133. Zinc ended at $2,200 a tonne from $2,170, and tin at $16,495 from a last bid of $16,200 on Friday.