As China became the first major economy to emerge from the global financial crisis, Scotiabank economist Patricia Mohr noted Chinese demand propelled LME copper and nickel prices to a six-month high.

Meanwhile, contrary to expectations, China's copper imports rose to another record high in June. Nickel prices also rallied this spring and summer "alongside tightening nickel supplies in China, linked to a tentative pickup in China's stainless steel production, the recent sale of 60% of Jinchuan's monthly nickel production to China's State Reserve Bureau and the shutdown of most nickel pig iron operations in China."

Scotiabank's Metals and Mineral Index strengthened significantly last month, up 4.7%. "A strong rally in base metals, moderate gains in precious metals and higher uranium prices more than offset a slight decline in potash and lower cobalt prices," Mohr said.

In her analysis, Mohr advised, "While we still expect a seasonal pullback in China's copper imports in the next several months, following restocking by fabricators, China could 'surprise on the upside.'"

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