Copper rallied to a record high on Monday, after a surprise jump in Chinese imports reinforced prospects for robust global demand and raised hopes of extended restocking by the world's top consumer.
Copper, often viewed as a barometer for the global economy due to its use in construction and power, posted its biggest daily gain in about two weeks, as the data suggested China's growth remained intact despite recent tightening measures.
"It could very well be that the Chinese economy is running hotter than anyone thinks," said Bart Melek, vice president and director of commodities with TD Bank Financial Group.
London Metal Exchange (LME) copper for three-month delivery extended gains to a record $10,170.25 per tonne in after-hours trade, having closed up $199 at $10,160, matching the previous high.
COMEX copper for March delivery added 9.25 cents, or 2 percent, to settle at $4.6285 per lb. The session range ran from $4.5435 to $4.6345, with the high coming within a hair of last week's record at $4.6375.
The bullishness spread to other metals, lifting tin to a record high of $32,460 a tonne. It ended up $675 at $32,450, as supply constraints in Indonesia continued to support prices.
Preliminary Chinese trade data showed imports of unwrought copper and semi-finished copper products rose to 364,420 tonnes in January.
The volume, which was up 5.7 percent from December and 24.7 percent from January 2010, was the highest since September and marked the third successive month analysts had expected imports to be under pressure from relatively low Chinese prices.
"The market's taken these numbers in a very bullish way," said Robin Bhar, an analyst at Credit Agricole. "China's appetite is insatiable."
Investors will focus next on Chinese inflation data due on Tuesday amid worries that any tougher stance by Beijing to rein in inflation could affect metals demand.
Talk swirled around financial markets that China's consumer prices may have risen 4.9 percent in the year to January, well below the consensus forecast of 5.3 percent.
"If we get a strong number ... say around 5.8 to 6, and the core moves up meaningfully above 2 percent, we are going to be worried about a significant tightening of Chinese monetary policy, and some of these base metals could be left wondering where do we go from here," TD Bank's Melek said.
LME copper stocks increased 5,050 tonnes to a six-month high of 401,775 tonnes, continuing a recent climb that has kept optimism about demand in check.
ETFS IN FOCUS
Aluminium ended at $2,514 a tonne from $2,496.
LME warehouse stocks dipped 4,725 tonnes to 4,594,725 tonnes, although they remain within reach of a record high of 4,640,750 tonnes hit in January 2010. Market sources said expiring finance deals were boosting stock levels.
Canceled warrants -- metal tagged for removal from warehouses -- rose by nearly 50,000 tonnes, having climbed by double that amount in Detroit since Thursday, pointing to a pick-up in demand from the auto sector.
"Strong auto production growth is good news for many commodities, accounting for about 25 percent of aluminium (including secondary), 25 percent of zinc, 15 percent of steel and 10 percent of copper usage," Macquarie said in a note.
Also grabbing investors' attention, Russia's United Company RUSAL Ltd, the world's largest aluminium producer, said an aluminium exchange-traded fund (ETF) could be launched soon in Britain.
"The question is, will the ETF launch mop up that excess?" Bhar said of LME stocks.
Rusal said it saw steady output growth in 2011, driven by strong demand from China and a rebound in North America.
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