Copper prices have closed slightly higher on the London Metal Exchange (LME), after a raft of positive economic data spurred investors to cut bets that prices would fall.

At the PM kerb close on Tuesday, LME three-month copper was up 0.4 per cent at $US7,005 a metric ton.

Aluminum settled 0.6 per cent lower at $US1,788.50 a ton.

Data released on Tuesday showed German manufacturing orders surged ahead of economists' forecasts in June, and a reading on UK industrial production also beat estimates.

The data followed a strong reading on US service-sector business activity on Monday as well as a better-than-expected Chinese services purchasing managers' index reading.

Since copper is used widely in manufacturing and construction, such economic indicators tend to be eyed for demand clues.

"The recent improvement in data releases, we believe, has been marginally bullish industrial metals," said Walter de Wet, a metals analyst at Standard Bank.

"While data prints and underlying fundamentals do not justify a sustained rally in prices, the data prints from last week may start raising questions about how bearish one should be on copper specifically. We believe that the current market positioning may be too bearish."

Bets that profit if copper prices fall have outnumbered wagers on higher prices for 23 straight weeks on the US futures market, according to weekly data from the Commodity Futures Trading Commission.

Attention this week should turn to the release of China's latest trade data, said analysts.

Chinese import and export data are due Thursday, while a reading on Chinese industrial production in July is scheduled for Friday.

China is the world's top consumer of base metals.

"Overall, we expect further choppy, range-trading to dominate although we would not be surprised if there was a slight upward bias to the ranges," said William Adams, head of research at FastMarkets.com.

 

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