-Aluminium market to see small surplus this year

-Zinc upside limited by potential mine restarts

LONDON: Copper prices climbed to their highest in more than seven weeks on Tuesday, boosted by growing expectations of monetary stimulus and a weaker dollar, but worries about demand in top consumer China are expected to limit gains.

Traders said copper was taking its cue from equity markets and oil, which have bounced after clocking up large losses in the aftermath of the British vote to leave the European Union.

Talk the US Federal Reserve will delay interest rate rises until December are weighing on the US currency, which when it falls makes dollar-denominated commodities cheaper for non-US firms, which boosts demand.

The possibility of monetary policy easing in Britain and in China have also helped sentiment.

“There was some chatter about a potential interest rate cut in China, which hasn’t materialised yet,” said Julius Baer analyst Carsten Menke. “But overall, industrial metals markets are very nervous because the overall backdrop is bearish.”

Benchmark copper on the London Metal Exchange ended up 2.3 percent at $4,818 a tonne. Earlier on Tuesday, it touched $4,830, its highest since May 5.

Copper’s break through the 200-day moving average at $4,786 could fuel further gains, one trader said, adding that the 21-day moving average at $1,595 would support three-month aluminium prices.

Aluminium gained 1.7 percent to close at $1,624 a tonne.

Morgan Stanley expects demand growth of 3.6 percent this year combined with supply discipline will mean the aluminium market has a small surplus of 34,000 tonnes this year. The bank sees aluminium prices averaging $1,543 in 2016.

China is the world’s largest producer of aluminium.

Zinc was up four percent to $2,075 a tonne. It has gained 27 percent this year on expectations of tighter markets due to mine closures.

Lead rose 1.9 percent to $1,735, tin added 0.5 percent to $16,900 and nickel climbed four percent to $9,340 a tonne. Nickel earlier rose to $9,345 a tonne, its highest since May 5.—Reuters