×

METALS-Copper rallies to 2-year highs, boosted by China and dollar

* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2

* Copper resistance at $6,200, near Feb high

* Traders see some producer selling, manufacturers restocking

* Nickel boosted by worries about Philippine ore supplies (Updates after copper breaks $6,200)

LONDON, July 25 (Reuters) - Copper prices hit their highest in more than two years on Tuesday, boosted by signs of robust demand from top consumer China, tight supplies, a weak dollar and a break of key technical levels.

Benchmark copper on the London Metal Exchange was up 3.2 percent at $6,217 a tonne at 1445 GMT, having earlier hit $6,234 a tonne, its highest since May 2015. Gains accelerated after New York opened.

"China growth is looking stronger, it's encouraging at a time when you would normally expect a lull," said Cantor Fitzgerald analyst Asa Bridle. "We have a perfect combination of decent demand and tighter supplies."

CHINA GROWTH: China's gross domestic product was up 6.9 percent in the second quarter year-on-year, faster than the consensus 6.8 percent and the government's 6.5 percent target.

CURRENCY: The U.S. currency fell to a 13-month low against a basket of major currencies, making dollar-denominated metals cheaper for holders of other currencies and potentially helping demand.

SUPPLY: Disruptions to copper shipments from Canada and Chile have undermined expectations for rising global copper supplies in the second half of the year.

FIBONACCI: A break of $6,030, a Fibonacci retracement, and the Feb. high at $6,204 saw funds that trade using buy and sell levels from black-box models jump on the uptrend, traders said.

TECHNICALS: Resistance is now seen around $6,400, an area of congestion from May 2015, but traders say copper is overbought and needs to consolidate before trying to tackle higher levels.

PHYSICAL DEMAND: "Manufacturers are restocking after drawing down copper stocks," a trader said. "There has been a fair amount of short-covering too ... Momentum seems to be running out of steam and we've seen some producer selling."

PHILIPPINES: President Rodrigo Duterte said on Monday he wants all mineral resources extracted in the country to be processed domestically and, if possible, to stop exporting such commodities.

NICKEL: The Philippines is the world's top supplier of nickel ore, for which China is the biggest market.

NICKEL PRICES: Worries about supplies pushed benchmark nickel up to $9,955 a tonne, its highest since April 11. The price was last up 1.3 percent at $9,910 a tonne.

NICKEL TECHNICALS: Upside barrier at $10,080 a tonne, the 200-day moving average. Support at $9,370 a tonne, the 21-day moving average.

PRICES: Aluminium was up 0.4 percent at $1,919 a tonne, zinc rose 1.9 percent to $2,842 a tonne, lead added 1.7 percent to $2,299 a tonne and tin gained 0.7 percent to $20,305 a tonne.

(Additional reporting by James Regan and Melanie Burton; editing by Adrian Croft and Louise Heavens)