Copper climbed in line with resurgent equity markets today, as short-term credit risk concerns appear to have eased following cash injections from the central banks.
Base metals slid across the complex last week as the fallout from the US subprime mortgage debacle dented investor confidence, and saw funds liquidate their positions to cover losses in equity stocks.
After central banks pushed cash into the markets to help liquidity last week, markets have stabilised and recover some of the losses from last week.
"Markets are at the mercy of risk indicators currently with the modest improvement in these measures of market liquidity and risk appetite this morning seeing most of the base metals trade higher," said JP Morgan analyst, Michael Jansen.
At 2.09 pm LME copper for three-month delivery rose to 7,520 usd against 7,455 usd at the close Friday.
Copper had lost around 3 pct since the end of July prior to today's gains.
A 200-tonne copper stock fall in warehouses worldwide, as reported by the LME this morning in a daily report, also helped the red metal rise.
"Copper and lead in particular have found renewed confidence, especially after stocks showed a net outflow," said analysts at RBC Capital Markets.
Copper prices were also supported by ongoing strikes at three Grupo Mexico mines, raising market player's fears of a tightening supply picture.
Reports that a man was killed during fights between two groups of workers close to the La Caridad mine is likely to heighten tensions.
Unions and management at Grupo Mexico's giant Cananea mine are waiting for a court decision on the legality of the strikes, which is due shortly.
Elsewhere, nickel was steady at lower levels. The grey metal has lost nearly 50 pct since striking an all time record of around 52,000 usd earlier this year, on a combination of demand destruction at higher prices and falling usage.
Again this morning, the LME in its daily report said stocks rose, bringing the inventory level in LME-certified warehouses up to 19,224 tonnes.
"Rising stocks are evidence of falling stainless demand and we believe the headline figure should easily top 20,000 tonnes over the near term, further pressuring prices," said Bank of America analyst Anatol Feygin.
By 2.09 pm nickel was trading at 26,600 from 26,650 at the close Friday.
In other base metals, aluminium was up at 2,600 usd from 2,590 usd, zinc was up at 3,345 usd from 3,330 usd and tin was lower at 15,600 usd from 15,800 usd. Meanwhile, lead was up at 2,990 usd from 2,915 usd at the close Friday, supported by a decline in LME monitored stockpiles.
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