Reuters reported that London copper hit its highest in nearly 2 months after trade data suggested China's economy is stabilizing while stronger than expected copper imports fanned earlier short covering gains spurred by a weak dollar.

A rebound in China's exports in July offered hope that the world's second largest economy may be finding its feet after a slowdown that has prompted the government to shore up activity.

Ms Natalie Rampono at ANZ in Melbourne said that "Markets are near record shorts in copper so after positive news in China's trade data, we could see copper prices finally break out from the recent trading range, but I don't think it will be sustained."

She said that "We're in the seasonally slower months for demand, so we're still expecting a bit of near term weakness. Markets may well be preempting the expected seasonal Q4 recovery in demand.”

ANZ sees prices averaging USD 7,330 in December, and closing the year around USD 7,500 per tonne. Three month copper on the London Metal Exchange rallied to USD 7,170 per tonne, it’s highest since June 17 before edging back to USD 7,163 per tonne as of 0710 GMT up 2.2% on the day.

The most traded November copper contract on the Shanghai Futures Exchange climbed 3.1% to close at CNY 51,530 per tonne. The dollar crumbled to 7 week lows on Thursday, triggering off a volley of short covering in metals. On demand, China's imports of copper rose 8.1% to 410,680 tonnes in July from 379,951 tonnes in the previous month.

Mr Matthew Wonnacott a consultant with CRU in Beijing said that "Scrap has been tight and you've got steady demand and quite a bit of surplus material has been locked up in LME warehouses. The market has tightened up quite a bit over the end of July, start of August. As long as the premiums stay high, China is going to be an attractive place to send material but that will depend how much surplus material is around."