METALS-Copper gains on demand hopes from Chinese data

By Eric Onstad

LONDON, June 16 (Reuters) - Copper prices rose on Monday after higher consumer spending in China raised hopes of a boost to metals demand in the country.

Benchmark three-month copper CMCU3 on the London Metal Exchange was up 0.7% at $9,708 a metric ton by 1600 GMT, having recovered by 20% after hitting its lowest since November 2023 in April.

Though China's factory output growth hit a six-month low in May, metals investors focused on the better than expected retail sales.

"You've got all these consumer goods; things like air conditioners, washing machines and EVs still booming. As long as people are buying all that stuff, then it's good for base metals," said Dan Smith at Commodity Market Analytics.

"We're in a volatile, but relatively resilient, economic backdrop for the time being."

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 rose 0.5% to 78,700 yuan a ton.

The expectation that U.S. President Donald Trump will impose tariffs on copper - as he has on aluminium and steel - has boosted U.S. copper prices and spurred flows of metal to the U.S. from elsewhere to take advantage of the premium.

U.S. Comex copper futures HGc3 climbed 0.4% to $4.83 per lb, bringing the Comex premium over LME copper to $949 a ton, down from $969 on Friday.

LME copper inventories MCUSTX-TOTAL dropped by another 7,300 tons to 107,325, data showed on Monday. That was the weakest level in more than a year and down 60% over the past four months.

Also supporting base metals was a weaker dollar .DXY, making dollar-priced commodities less expensive for buyers using other currencies. FRX/

Escalating conflict between Israel and Iran, however, curbed some of the optimism.

"Geopolitics has new uncertainty with the conflict, and this has raised concern over metals consumption," said one Beijing-based metals analyst.

Among other metals, LME aluminium CMAL3 edged up 0.5% to $2,515 a ton, zinc CMZN3 gained 1.4% to $2,659.50, lead CMPB3 rose 0.9% to $2,008.50, while nickel CMNI3 was down 0.5% at $15,050.

Tin CMSN3 was little changed at $32,680, having earlier touched $32,940 for its highest since May 27.

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($1 = 7.1808 Chinese yuan)

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