Shanghai copper rose nearly 3 percent on Monday, lifted by strong equities and a weak dollar, as markets shrugged off news that Chinese manufacturing shrank in July, but traders and analysts said room for a further rise might be limited.
"Strong equities are supporting metals. We are seeing some stop-loss buying," said a Shanghai-based trader. "Metals may further rise today and tomorrow, but will likely consolidate in the second half of the week." Shanghai's benchmark third-month copper futures contract climbed to 58,000 yuan a tonne, before easing to close at 57,690 yuan, up 2.5 percent from the previous close.
The most-active contract for November delivery rose 2.3 percent to 57,590 yuan. LME copper stood at a premium of 915 yuan over Shanghai's benchmark, leaving the arbitrage window tightly shut. Shanghai aluminium rose to 15,685 yuan a tonne, its highest since May 14. Shanghai zinc rose 3 percent to 16,630 yuan a tonne, after hitting 16,715 yuan a tonne, its highest since May 14.