Singapore - Shanghai copper rose 0.8% on Wednesday after modest falls in London in the previous session from a 7-½ month high, but growing optimism about the outlook for the world's economies supported prices above $5 000.
April US pending home sales rose 6.7%, reinforcing more positive manufacturing data from around the world on Monday, and fuelling confidence the global economic slowdown may have turned a corner.
Shanghai's benchmark third month copper contract rose 300 yuan to 39 990 yuan by 01:59 GMT. The most-active September contract also rose 0.8% to 40 050 yuan.
London Metal Exchange copper for delivery in three months rose $10 to $5 060 a tonne, having touched a 7½-month high of $5 145 in the previous session and is up 65% year to date.
"A lot of this is dollar-related. You saw on Tuesday the market testing support when the dollar picked up. If the dollar really switches direction you'll see a lot of people sucking on some pretty bitter positions," a dealer in Hong Kong said.
"I can't see sustained prices above $5 000. The Chinese are reluctant buyers at these levels. They were buying before because things were cheap and that isn't the case any more. Copper is probably set for another bout of range-trading - $5 100 at the top and $4 000 the base."
The euro traded above $1.42, just off Tuesday's fresh highs for the year, as the housing sales data reinforced optimism about the health of the global economy, sapping safe-haven demand for the dollar.
LME aluminium fell $2 to $1 470, while Shanghai metal was little changed at 12 890 yuan.
The lightweight metal saw some support from the housing data - aluminium is used in building siding in the United States - but vehicles sales numbers were more gloomy.
GM and Ford reported sales down by 40.9% and 35.8% in the year to May, and Chrysler's sales fell 45.5%.
Data for May alone showed some improvement for the first two versus the year to date with sales down by 26.6% and 21.3% respectively.
"The market needs more time and data to decide whether the recent strong sentiment may continue," brokerage Triland said in a report.
Wednesday sees the release of revised Eurozone GDP data and producer prices, while later in the day attention will switch to US numbers, including the ADP employment report and factory orders.
- Reuters
PNA Price at posting:
$2.00 Sentiment: None Disclosure: Not Held
