Copper traded near the highest level in a month after recording a third weekly advance as investors weighed whether demand in China, the largest user, can be sustained. Zinc, nickel, aluminum and lead rose.
Metal for delivery in three months climbed as much as 0.6 percent to $7,417 a metric ton on the London Metal Exchange and was at $7,390.75 at 10:16 a.m. in Shanghai. The metal gained 5.5 percent in the past three weeks and climbed to $7,480 on May 8, the highest level since April 12.
LME copper stockpiles fell for a second week to 604,250 tons on May 10, the lowest in almost a month, as orders to remove copper from LME warehouses jumped 35 percent to a record 212,875 tons. SHFE inventories slid to a six-month low at 195,043 tons last week.
“Demand certainly improved in the past few weeks, lending support to prices,” Ma Jian, an analyst at Orient Futures Co., said by phone from Shanghai. “Still, falling cash premiums in Shanghai raised concerns that restocking, or the seasonal boom, is close to the end.”
Metal for immediate delivery on Shanghai’s Changjiang Nonferrous Metal Market was quoted at a premium of about 70 yuan to the Shanghai Futures Exchange front-month futures contract on May 10, down from more than 200 yuan in April, according to Ma. Copper for delivery in September on the SHFE dropped 0.5 percent to 53,180 yuan ($8,649) a ton.
Net-short positions, or wagers on falling prices, held by funds shrank to 16,798 futures and options contracts as of May 7 from 23,368 a week earlier, according to the U.S. Commodity Futures Trading Commission. Copper for delivery in July on the Comex in New York was little changed at $3.3515 per pound.
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