Copper set for biggest monthly gain since December

LONDON, May 31 (Reuters): Copper prices dipped on Friday, but headed for their biggest monthly gain since December, underpinned by recovering demand from top consumer China, while nickel rebounded after four days of losses on persistent concerns about a supply shortage.
Aluminium was on track for its biggest monthly rise since February on the back of healthy demand, but an analyst was wary about further prices gains due to high stocks levels.
Three-month copper on the London Metal Exchange (LME) closed down 0.57 per cent at $6,845 a tonne as traders adjusted positions ahead of the weekend. It hit a near-three-month high of $6,966 earlier this week.
Prices for the metal used in power and construction are up 3.1 per cent this month, the biggest monthly increase this year, boosted by seasonally strong second-quarter demand from China.
China is the world's biggest copper consumer, accounting for around 40 per cent of global refined demand.
"We are quite optimistic with regards to China. We see that import data so far this year shows that Chinese demand for copper is relatively robust," Commerzbank analyst Daniel Briesemann said. "There seems to be some real demand behind the drop in stocks and copper prices should continue to rise throughout the year."
Reflecting a shortage of available physical supply that is underpinning the market, copper stocks on the LME are at 171,350 tonnes, near their lowest level since August 2008.
The tightness pushed cash copper prices to $101 a tonne above the benchmark contract on Wednesday, the highest premium in more than two years. It traded as high as $90 on Friday.
Some worries about China's economy resurfaced on Thursday after Beijing called on local governments to accelerate their spending over the next month to boost activity, ahead of a key manufacturing gauge at the weekend.