Bareksa.com - London copper edged to its highest in nearly three months on Tuesday as markets reopened after a holiday weekend, with traders expecting more gains on robust buying in China.

Prices have rebounded almost 10 percent from more than 3-year lows reached in March, underpinned by seasonally strong demand from top user China, while charts suggest a further climb could be on the horizon.

"Technically and fundamentally, it's looking like a pretty good picture at the minute," said analyst Joel Crane at Morgan Stanley in Melbourne.

"Copper broke through the 100-day moving average for the first time in a while and inventories have been falling pretty swiftly."

Three-month copper on the London Metal Exchange touched $6,966 a tonne on Tuesday, its highest since March 7. By 0343 GMT, it stood at $6,938.25, up 0.2 percent on the day.

Prices closed above the contract's 100-day moving average at $6,908 a tonne on Friday for the first time since mid-February.

The most-traded August copper contract on the Shanghai Futures Exchange edged down 0.2 percent to 48,850 yuan ($7,800) a tonne on Tuesday. It hit its highest in three months at 49,210 yuan a tonne the day before.

China's factory sector turned in its best performance in five months in May, a preliminary HSBC survey showed earlier this month.

Meanwhile, global stockpiles have been falling, with LME stocks at their lowest since 2008 <MCUSTX-TOTAL> and ShFE inventories near their smallest since 2011.

Morgan Stanley estimated China's bonded stocks at 600,000 tonnes, compared with trader estimates of about 650,000-700,000 tonnes in late April.

Also supporting metals prices, European Central Bank chief Mario Draghi said it must be "particularly watchful" for any negative price spiral in the euro zone.

Elsewhere, dozens of protesters caused tens of millions of dollars in damage to vehicles, equipment and buildings at Vale's nickel mining site in New Caledonia, as anger boiled over at a chemical spill into a local river.

The Vale plant, which was closed earlier this month, had been expected to produce about 40,000 tonnes of nickel this year, out of global supply of around 2 million tonnes.

LME nickel prices traded at $19,558 a tonne, down 0.2 percent from Friday but still up more than 40 percent this year. (Source : Reuters)