London Metal Exchange (LME) metals have closed mostly higher after upbeat manufacturing data from China and the euro zone pushed some investors betting on lower prices out of the market, analysts said, tipping gains to continue in the short term.
At the close of open-outcry trading in the LME ring on Monday, LME three-month copper was up 2.0 per cent on Friday's close at $US7,237 a metric ton.
Aluminium traded 0.9 per cent higher at $US1,829 a ton.
The final reading of the HSBC China manufacturing purchasing managers' index for August came in at 50.1, back in growth territory and a big jump from July's 47.7 level. The official Chinese PMI released on Sunday rose to 51.0 in August, its highest level in 16 months and up from 50.3 in July.
The manufacturing PMI for the euro zone as a whole showed factory activity rising at the fastest rate in more than two years.
The data lifted prices as it stoked hopes for better demand for industrial metals and their applications in many sectors. Base metals fell last week on fears about a US military strike against Syria. A delay in the expected military response to Syria's use of chemical weapons has since helped ease recent market concerns, analysts said.
"We believe the improved data prints may add support to industrial metals such as copper into October -- or at least make participants think twice about shorting commodities -- despite the fact that we forecast surplus markets for many commodities in 2013," Standard Bank analyst Walter de Wet wrote in a note.
Newedge director of Asian commodity trading, Richard Fu, also said gains were likely to extend in the near term as Chinese economic figures and stock markets improve.
Even so, Standard Bank cautioned that many manufacturing sectors in Asian economies are still struggling, noting PMI readings below 50 in India, Indonesia and Australia.
Furthermore, analysts cautioned that the recent reversal of so-called short positions in some base metals markets leaves a risk for this to turn quickly again.
"The market is now positioned much less bearish on many metals than two months ago," noted de Wet
"The risk remains that the market length rises too much, and too fast, with underlying real economic conditions not maintaining (their) current momentum (and) speculative longs liquidate once again."
August US payroll data due later this week and the Federal Reserve's next policy meeting later in the month may also direct price activity, said Fu.