LONDON, April 9 (Reuters) - Copper prices neared a 14-month high on Tuesday on fund buying, despite rising inventories highlighting ample supply.
Three-month copper on the London Metal Exchange (LME) rose 0.4% to $9,442.5 a metric ton at 1055 GMT. It hit $9,484.50 a ton on Monday, its highest level since January 18 last year.
"This is an expectation-driven rally driven by macroeconomic factors, less due to fundamentals. More funds are betting on upside in forward prices of copper," a trader said.
More banks and analysts have raised their price targets, including Citi, which now expects copper to hit $9,700 in three months instead of $9,200 a ton.
Fund buying remained brisk in the West and China's reopening on Monday generated catch-up buying after an initial bout of selling, Ed Meir, a consultant at brokerage Marex, said in a note.
The most-traded May copper contract on the Shanghai Futures Exchange earlier hit as much as 76,700 yuan a ton, the highest on record.
Some traders are wary of the rally, however, saying gains could be limited by gains in copper inventories, a sign of healthy supply.
A total 10,900 tons of copper arrived at LME registered warehouses in South Korea, Taiwan and Singapore, data showed on Tuesday. <0#MCUSTX-LOC>
The sharp rally in LME copper prices has created a price gap with SHFE in China, home to the world's largest copper smelters.
The gap touched its widest since 2013 on Tuesday, creating opportunities to capture differentials between the two.
"The arbitrage today is deeply profitable for Chinese exports into LME warehouses." a second trader said.
Copper is also supported by the prospect of output cuts in China where smelters struggled with shortages of mined raw material supply.
LME aluminium is flat at $2,460.50 a ton, nickel rose 0.8% to $18,020, zinc rose 1.5% to $2,702.50, lead edged up 0.7% at $2,158.50 and tin jumped 2.2% to $30,485. (Reporting by Julian Luk; additional reporting by Mai Nguyen in Hanoi; editing by Alexander Smith)
