London copper futures rose 1.7 percent on Tuesday after a four-day weekend, lifted by steady performances by metals markets in Shanghai and New York, and zinc jumped 4 percent on signs of consumer buying.
Copper for delivery in three months on the London Metal Exchange rose $130 to $7,970 a tonne at 0700 GMT.
"Demand is still an easy story -- demand is healthy across Asia, but supply is more difficult to assess," Gerard Burg, an analyst at National Australia Bank, said. He said price direction going into the second quarter would hinge on energy supplies in China and whether hydropower reserves were sufficient to power its huge industrial base. "If there are shortages, China may seek to supplement its copper supplies from the international market ... and you will see prices rise."
China imported an average 4,698 tonnes of copper a day in February, up 14 percent from January and well above the 2007 average of 4,082 tonnes, according to customs data on Monday. Copper consumption in the world's largest user of the metal rose 0.7 percent in January and February from the previous year, according to Reuters calculations, shrugging off bad weather and a weaker U.S. economy.
Executives at some of the world's biggest producers said prices will remain strong, citing demand from China.
Prices retreated from the record high of $8,820 seen early this month as part of a commodity-wide sell-off, but copper could revisit those heady levels as demand picks up in the traditionally strong second quarter.
"We are used to cycles (in prices). I don't think this fall implies a permanent decline, it's within the volatility copper has experienced in this scenario of high prices," BHP Billiton Base Metals Division President Diego Hernandez said.
Spot gold also gained, supported by a waning dollar - at $1.5545 against the euro -- heading back towards a record low of $1.5905 against the single currency hit last week.
The most-active June copper contract on the Shanghai Futures Exchange rose 1 percent, or 670 yuan, to 64,630 yuan ($9,161) a tonne at the closing bell. Spot copper in Shanghai rose 100 yuan a tonne, trading in a slight backwardation between 64,850 and 65,000 yuan.
"It seems that the strong performance in Shanghai and COMEX over the holidays is boosting confidence in copper, and prices should continue to go higher," a dealer in Shanghai said. "The second quarter is the traditional high season for demand. Many domestic consumers will get new loans in April and we should see a much stronger performance than in the first quarter."
He added that should LME futures break back above $8,000, they would drag Shanghai prices quickly towards 66,000 yuan. The price difference between London and Shanghai copper narrowed during the break, making three-month LME copper around 1,000 yuan more expensive in yuan terms, including 17 percent Chinese VAT, than the benchmark Shanghai contract. Before the holidays, the difference was above 2,000 yuan.
Shanghai June aluminium gained 2 percent to 19,780 yuan a tonne, while the June zinc contract added 2.8 percent, rising to 19,800 yuan.
LME aluminium rose 1.8 percent to $2,895 and zinc surged 4.4 percent to $2,370.
"Some consumer interest surfaced during the Easter break and people jumped on zinc at the LME open. That is adding to short- covering in the market in light of the stronger performances in aluminium and copper," a dealer in Singapore said.