Array

SHANGHAI, July 12 (Reuters) London Metal Exchange copper climbed to $8,000 a tonne on Wednesday, supported by strong fundamentals and gains that propelled nickel prices to an all-time high the previous day.

LME copper for delivery in three months was up $100 or 1.3 percent at $8,000 a tonne at 0734 GMT, the highest since June 5.

Copper closed up 2.2 percent at $7,900 on Tuesday.

Nickel touched a record peak of $25,700 on Tuesday before ending up $1,000 at $25,650 on dwindling stocks and strong demand from stainless steel mills, especially in China.

''Sometimes, a high nickel price hurts demand, but at this moment there is no indication of lower purchases as the inventory is still decreasing,'' said Peter Richardson, chief metals economist at Deutsche Bank.

Nickel stocks in LME warehouses fell by a further 486 tonnes on Tuesday to 8,418 tonnes, the lowest since August 2005, with the premium for cash nickel over the three-months price widening to $1,900. On May 11, the premium was $475.

Copper was also supported in Asia after coordinated bomb blasts in India pushed gold to a five-week high.

On the supply side, the union at Chile's Escondida, the world's biggest copper mine, said on Tuesday there had been no progress in talks with the company to negotiate a new contract to replace one that expires in early August.

Mine workers are labouring at a slower-than-usual pace in hopes of spurring along the talks, a union representative told Reuters, but BHP Billiton , which controls the mine, said production had not been affected [ID:nN11177167].

The most active copper contract in Shanghai, September, ended up 1,860 yuan at 73,300 yuan ($9,173) a tonne, as traders sought to narrow the gap with LME copper.

''Traders have been arbitraging as they believe Chinese prices would chase LME prices in the near future,'' said Yang Jun, an analyst at Dalian Northern Futures.

Shanghai spot copper prices were between 65,200 yuan and 65,600 yuan, up 475 yuan from the previous day.

Supply worries about a mine shutdown at Jiangxi Copper eased as the company resumed production yesterday. A senior official at the company said the outage resulted in a reduction of only 400 tonnes of copper in ore.

''Traders paid less attention to such production information at the moment due to abundant supply in the market, backed by a stockpile release from China's State Reserve Bureau,'' said Cai Luoyi, analyst at China International Futures Corp.

Those releases by the SRB and higher domestic production helped cut imports of unwrought copper and copper products by 24.6 percent in the first half of the year.

China imported 172,794 tonnes of unwroght copper and products in June, bringing imports for the first half of the year to 994,254 tonnes, the country's customs administration said on Wednesday [ID:nPEK275797].

LME aluminium futures traded at $2,605 a tonne by 0742 GMT, unchanged from Tuesday's close.

Shanghai's most-active September aluminium contract ended at 19,520 yuan a tonne, up 10 yuan from Tuesday's close.

Union workers at Ormet Corp's Burnside, Louisiana, alumina refinery will vote on July 16 on whether to accept the latest labour contract offered by the company and end a 19-month-long strike, a union representative said on Tuesday.

($1=7.9904 yuan) REUTERS PV PM1446