LME copper rises to $6,188.50/tonne

London metals rose on Monday as the dollar remained near one-year lows, shrugging off a cloudier outlook for demand growth after slowing industrial profits were the most recent signal of a weakening China economy.

London Metal Exchange copper rose half a per cent to $6,188.50 a tonne by 0140 GMT, having closed on Friday down one per cent when it hit a two week low.

Shanghai Futures Exchange copper traded a tad firmer, up 0.2 per cent at 50,120 yuan ($7,217). Open interest has dropped steeply in the past month to below 500,000 lots. It now stands at the lowest since February 2017 suggesting short-covering.

Profit growth at China's industrial firms slowed for a fifth consecutive month in September as the sales of raw materials and manufactured goods further ebbed, pointing to cooling domestic demand in the world's second-biggest economy. The slowdown was in line with data last week that showed September's factory output grew at the weakest pace since February 2016.

The US economy slowed less than expected in the third quarter as a tariff-related drop in soyabean exports was partially offset by the strongest consumer spending in nearly four years, keeping growth on track to hit the Trump administration's 3 per cent target this year.

China is likely to use its vast currency reserves to stop any precipitous fall through the psychologically important level of 7 yuan per dollar as it could risk triggering speculation and heavy capital outflows, policy insiders said.

Hedge funds and money managers added to their net short position in Comex copper contracts in the week to October 23, the US Commodity Futures Trading Commission had said on Friday.

Premiums for aluminium and zinc have come off $5 and $10 respectively, reflecting easier availability of supply. LME nickel slid 2 per cent to hit the lowest in nearly two years on Friday on tempered enthusiasm from investors for the battery raw material. Prices edged up 0.2 per cent on Monday to $11,925 a tonne.

Asian shares bounced from last week's steep declines on Monday, though the sentiment remained fragile amid heightened worries about corporate earnings and a slowdown in global economic growth.