The copper price raced ahead on the first trading day of the third quarter, adding more than 3%.

Spot copper prices raced ahead 3.5% or over 10c a pound to $3.16 in New York afternoon trade on Monday, recovering from near 3-year lows of just above the $3 a pound level set last week.

Negative economic news from China – responsible for 42% of total global copper demand of 20.5 million tonnes – has pushed down price for the red metal by more than 12% this year.

But there are increasing evidence that that copper at these levels are highly attractive to Asian traders who have been drawing down inventories in record numbers.

Bloomberg reports canceled warrants from London Metal Exchange warehouses in Malaysia, Singapore and South Korea have surged to an all-time high, while orders to draw down copper stocks from storage in Malaysia alone more than doubled in the past month.

At the same time premiums over the quoted LME price paid by Chinese importers to cover transport and insurance are at levels last seen in 2009, an indication of strong demand at ground level.

The LME operates more than 700 warehouses worldwide and the firm, recently acquired by Hong Kong's exchange operator, processes more than 80% of the global trade in metals.

Despite recent drawdowns LME inventories – a good indicator of overall demand – are still more than triple October 2012 levels at above 650,000 tonnes; levels last seen in 2003 on fears over Chinese slowdown fears.