Copper prices recover in light bargain hunting

By Nick Trevethan

SINGAPORE (Reuters) - Copper prices rose in London and Shanghai on Monday, reversing early losses in light bargain hunting after the previous session's 0.8 percent fall.

"The very near-term sentiment is that prices should be up and after the fall on Friday people are lifting them back where the market believes they should be," a dealer in Sydney said.

Three-month copper on the London Metal Exchange rose $61 to $6,301 a tonne by 0715 GMT, while Shanghai's third month gained 720 yuan to close at 49,500.

Earlier London copper fell to $6,170, while Shanghai dipped to 48,420.

With analysts and traders returning to work after a fairly low-key annual LME Dinner last week, many in the market were looking for prices to ease in the fourth quarter on worries about rising stocks and slowing Chinese imports.

"The take-away from LME week was that copper will fall in the fourth quarter. That means just one thing -- buy. With everyone seemingly on the same side of the street it might be worth taking a contrary view," the Sydney trader said.

LME aluminium rose $4 to $1,909 a tonne. Aluminium is the weakest performing LME metal this year, up 24 percent versus 105 percent for copper and 122 percent for lead, hamstrung by significant capacity and stock overhangs.

But analysts have been encouraged by the declining trend in stock levels over the past two months.