BEIJING, April 1 (Reuters) - Copper prices in Shanghai climbed on Monday as China's positive industrial data raised the demand outlook of the metal, but gains were capped by high inventories.
The most-traded May copper contract on the Shanghai Futures Exchange SCFcv1 closed morning trade 0.7% higher at 72,810 yuan ($10,072.35) per metric ton, having notched a 5.4% rise in March, its biggest monthly gain in 16 months.
The London Metal Exchange (LME) is closed on Monday for the Easter Monday holiday.
The gains followed an official factory survey on Sunday showing China's manufacturing activity expanded for the first time in six months in March.
Though the pace of growth was modest, it was also the highest PMI reading since March of last year, when momentum from the lifting of COVID-19 restrictions in China began to stall.
Data showing easing U.S. prices also bolstered investors' hopes of the Federal Reserve cutting interest rates in June.
However, mounting stocks weighed on prices during the session. On-warrant copper stocks monitored by the SHFE CU-STX-SGH, hovering near a four-year peak, was almost nine times higher than that at the beginning of this year.
The higher-than-usual stocks were attributed to the still slow demand from end users, especially after copper futures surged last month as raw material shortages led to smelters' plans to control their output, China Futures analysts said in a note.
Spot prices to buy copper remained at a discount to futures prices in the last one week SMM-CU-PND.
SHFE aluminium SAFcv1 gained 0.3% to 19,685 yuan a ton, zinc SZNcv1 nudged 0.1% higher to 20,985 yuan, while nickel SNIcv1 lost 0.4% to 129,910 yuan, lead SPBcv1 declined 1.4% to 16,490 yuan, and tin SSNcv1 was down 0.2% at 225,590 yuan.
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($1 = 7.2287 Chinese yuan renminbi)
(Reporting by Siyi Liu and Andrew Hayley; Editing by Rashmi Aich and Sonia Cheema)
