NEW YORK/LONDON, July 9 (Reuters) - Copper rallied to its highest in nearly two weeks on Friday, feeding off the improved economic sentiment in global equity markets and rising ahead of key Chinese trade data, expected to show rising import levels into
the world's top metals consumer.
"Ultimately it's an economy question," Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in Toronto, said of copper's steadier price performance this week.
"The market was oversold ... the talk of a double-dip (recession) and European bankruptcies had gotten ahead of itself," he said.
Copper for September delivery HGU0 on the COMEX metals division of the New York Mercantile Exchange rose 3.80 cents, or 1.3 percent, to end at $3.0535 per lb, after dealing between $3.0160 and $3.0705, its highest level since June 29.
On the London Metal Exchange, benchmark copper for three-months delivery CMCU3 hit a two-week peak at $6,775 per tonne, before closing up $159 at $6,769.
Strong rallies in the Shanghai Composite .SSEC and in Hong Kong's Hang Seng Index .HSI set the more positive tone across the industrial metals complex, BMO's Melek said, signaling better economic prospects in China.
Analysts also expected copper imports into China to rise in June for the first time in the past three months. "There seems to be quite a lot of copper going into China. It seems they're taking advantage of lower prices," John Meyer, analyst at Fairfax, said.
Buyers in the country are believed to have increased booking of spot copper imports since May as the arbitrage has mostly stayed open for buying from the LME and selling to Shanghai.
"If we get decent import numbers, I think the market rallies a bit on it," Melek said.
Latest LME data showed copper stocks fell 2,100 tonnes to 436,900 tonnes, their lowest level since last November, extending a falling trend that began in mid-February. However, many analysts remain concerned about the near-term outlook for industrial metals due to a shaky economic backdrop.
"I still don't expect a full-fledged take off in prices mainly because it's going to take a while until investors are convinced everything is OK," Melek said.
Among other industrial metals, tin CMSN3 and nickel CMNI3 closed up $100 at $17,650 a tonne and $19,500 a tonne, respectively.
Nickel supplies are set to increase after a majority of unionized workers at two of Vale's (VALE5.SA) nickel operations in Ontario, Canada voted to ratify a new five-year contract.
Aluminum CMAL3 firmed $19 to end at $2,004 a tonne, zinc CMZN3 rose $49 to $1,904, and lead CMPB3 gained $17 to $1,845.