Copper rose on Monday as weak Chinese import data prompted speculation about looser monetary policy from Beijing, while nickel hit a two-month high on worries over potential supply constraints from the Philippines. The lower chamber of Philippines' Congress has approved at the committee stage a bill seeking to halt exports of unprocessed mineral ores, one of two bills aimed at squeezing more value from the country's mineral resources.
The bills, which would require domestic processing of all minerals extracted in the country prior to export, have raised concern at the possibility of a halt to exports of nickel ore from the Philippines, in line with similar action by Indonesia. London Metal Exchange nickel has risen more than 7 percent since news last week of the potential Philippines ban. It hit a two-month top earlier of $19,940 a tonne, and ended at $19,930 a tonne, up 1.9 percent.
"Sure (nickel's price spike) is all based on future impact rather than the immediate well-supplied market conditions but consumers are now having to chase the market again," said broker Triland in a note. LME copper meanwhile rose 0.2 percent to end at $6,990 a tonne, having closed flat last week and shed 1.9 percent in August. China data released earlier showed August import growth posted its worst performance in over a year, stoking speculation about whether authorities should loosen monetary policy further to revive domestic demand.
China's imports of copper were flat from a month ago at 340,000 tonnes in August, data showed. Analysts said the numbers would be taken as positive, given many were expecting imports to drop in the wake of a financing scandal at China's Qingdao port. China consumes about 40 percent of the world's copper and its moderating economic growth has weighed on the metal this year, as have expectations that the copper market will move into a surplus by the end of this year.
A Reuters poll in July pegged the 2014 surplus at 226,000 tonnes. "After the summer break we are going to see better (copper) demand, which in a tight market might have a positive impact on prices ... (but) it probably won't last long because the surplus will be felt by the fourth quarter," said Gianclaudio Torlizzi, a partner at metals consultancy T-Commodity. Indicating tight spot market conditions, cash copper cost $16.75 a tonne more than three-month copper on Friday, and has traded at a premium to the benchmark future since late July.
Elsewhere, data last week showed US employers hired the fewest workers in eight months in August and more Americans gave up the hunt for jobs, providing a cautious Federal Reserve with more reasons to wait longer before raising interest rates. Investors began losing confidence in copper last week. Hedge funds and money managers cut their copper net long or buy positions to their lowest since June as metal prices broadly fell in the week to September 2, the latest CFTC Commitments of Traders report showed. In other metals, a broad-based revival in demand from auto and packaging sectors has driven aluminium consumption at a time when much of the world's surplus stock is tied up in delivery backlogs in global exchange warehouses, supporting prices.
Two Japanese aluminium buyers have agreed to pay a producer a record premium of $420 per tonne for metal to be shipped in the October-December quarter, two sources directly involved in the quarterly pricing talks said on Friday. Aluminium ended 0.2 percent higher at $2,097, zinc ended 0.2 percent lower at $2,390, led slipped 0.2 percent to end at $2,199 and tin dropped 0.5 percent to close at $21,350.