Copper above two-month low

Melbourne

London copper hovered near two-month lows on Tuesday, with signs of oversupply from a flood of inventory into exchange stocks amid a modest pick-up in demand.

Activity has begun to step up from the northern hemisphere summer lull, with physical traders in Asia reporting more enquiries across most metals, although little in the way of big volume business as yet.

Metals such as zinc, nickel and tin have outperformed, priming for a seasonal demand uptick late in the third quarter, but swelling supply is expected to pressure bellwether copper and aluminium.

"While the recent macro-driven rally in base metals has disrupted the bear market, we still foresee downside to copper prices from a fundamental perspective in the coming quarters," JP Morgan said in a report.

"Cost deflation continues to sink the marginal cost support levels as mine supply continues to grow.”