Huge rally in copper price

In late afternoon New York trade on Monday July copper changed hands nearly 2% or 6c a pound higher on optimism about demand from China and receding fears about supply growth.

July copper futures in New York in late afternoon dealings were last trading at a two-month peak of $3.1420 a pound after earlier in the day hitting a high of $3.1555.

The copper price has now recovered 6% since falling to near four-year lows in March although the metal is still down from $3.37 at the outset of 2014.

There was no fresh news out of China, responsible for more than 40% of global demand, on Monday that could have sparked the rally bar a fresh commitment from Beijing to push through capital market reforms announced earlier this year.

Optimism about the market-friendly measures was also somewhat dampened by Chinese President Xi Jinping saying that slower growth is the "new normal" for the country.

Traders were digesting fata released last week showed the country's inbound shipments of copper surged 52% to 450,000 tonnes in April.

April's jump brought the first quarter total to a record-breaking 1.75 million tonnes, although the numbers are misleading since as much as 60% of copper inventories in China are tied as collateral for trade credit and do not necessarily reflect stronger end-user demand.

China's surging imports coincide with a fall in copper stocks in LME warehouses to levels last seen in 2008.

There were also unconfirmed reports last month indicating that the Chinese State Reserves Bureau has bought up to 350,00 tonnes of copper in March and April to move into state warehouses.

The copper price has been hurt this year a combination of the slowdown in China and fears over surging supply.

Output is to top 22.2 million tonnes this year from just over 21 million tonnes in 2013 led by Codelco's new 160,000 tonnes-plus Ministro Hales mine, Glencore's Las Bambas project in Peru it sold to China's Minmetals recently, the first full year of production at Rio Tinto's Oyu Tolgoi mine in Mongolia and expansion at BHP Billiton's already giant Escondida mine.

But after an abnormally quiet 2013 with few supply disruption to existing operations, 2014 could yet turn out to be different.

Freeport McMoRan and fellow Indonesian copper miner Newmont Mining are deferring exports from Indonesia due to onerous new duties slapped on copper concentrate exports at the start of the year, while delays in bringing projects on stream to replace aging mines at state-owned Codelco, which dwarves other producers of the metal, could also limit supply growth.

Codelco, which produced 1.622 million tonnes last year, plans to invest $5 billion annually over the next five to six years to replace exhausted reserves and increase production with hopes of hitting than 2 million tonnes a year by the end of the decade.