Copper rose on Thursday, trading not far from the year's high, helped by a stronger euro on growing expectations Greece would reach a bailout deal to avoid a messy default, but gains were limited by data showing rising inflation in top consumer China.
Benchmark copper on the London Metal Exchange (LME) rose to $8,602.50 a tonne at 11:54 SA time, up 0.3 percent from a close of $8,580 on Tuesday.
The metal used in power and construction earlier climbed to a session high of $8,658.25, not far from this year's peak of $8,679.50 a tonne, which was its highest level since mid September.
A rise in the euro to two-month highs versus the dollar helped support copper, as a weak dollar makes commodities priced in the US unit cheaper for holders of other currencies.
“The market is being driven by the developments in Greece and hopes that there will be a new bailout package which will help solve the crisis. The weaker dollar is also giving some support,” said Daniel Briesemann, an analyst at Commerzbank.
Greek political leaders have agreed on all points of a bailout package except one, pension cuts, and officials said discussions with international lenders would continue so a deal could be concluded before a meeting of euro zone finance ministers on Thursday.
Greece is also expected to dominate the European Central Bank (ECB)'s monthly meeting with all eyes on what the bank is willing to do to help the highly indebted country.
A rate decision is due at 14:45 SA time, with a news conference starting at 15:30 SA time. The central bank is expected to keep interest rates on hold ahead of a major funding operation later this month.
In China, annual inflation spiked to a consensus-busting 4.5 percent in January as spending jumped during the Chinese Lunar New Year holiday season, breaking a five-month softening trend.
“The China inflation data is weighing on (metals) prices and putting some brakes on a more pronounced upward trend at the moment,” Briesemann said,
“If further data (in coming weeks) points in the same direction then I think expectations regarding a tightening of monetary policy could gain the upper hand, but not for the time being.”
China is the world's top copper consumer, accounting for around 40 percent of refined copper demand last year.
RIO TINTO
In industry news, global miner Rio Tinto reported a 6 percent fall in second-half profit before $9.3 billion in writedowns mainly on its aluminium business, but appeased investors with a massive dividend hike.
Aurubis AG, Europe's largest copper producer, will continue to consider acquisitions of copper smelters or product makers, its new CEO said.
Aluminium rose to $2,288 a tonne, from a close of $2,253 on Wednesday.
Zinc, used in galvanising, rose to $2,133 from $2,115, while tin climbed to $25,500 from Wednesday's close of $25,400.
Tin prices were cushioned by news that shipments out of top exporter Indonesia fell 27 percent on the year.
Battery material lead rose to $2,202.75 from $2,181 and stainless steel ingredient nickel climbed to $21,566 from $21,500. - Reuters