Shanghai copper came within a whisker of its highest in four years on Monday after a rally in steel unleashed short-covering across metals, before prices quickly retraced in line with a stronger dollar. Shanghai Futures Exchange copper surged more than 1 percent to top out at 51,060 yuan ($7,598), just shy of February's 51,200 yuan high, a breach of which would take prices back to levels last seen in April 2013. SHFE copper last traded up 0.1 percent at 50,440 a tonne.
SHFE aluminium rallied more than 3 percent to hit the highest since January 2013 on prospects of supply shutdowns in top producer China. "The recent driver of prices and demand in China has been the iron ore and steel rebar prices ... which tend to lead to general buying of all the industrial metals," said Kingdom Futures in a report.
Premiums to obtain physical delivery of copper and zinc either in Shanghai or enroute to Shanghai fell, reflecting falling physical demand due to high prices. Nickel premiums hit the highest in two years, due to robust financing demand.