Slight improvements noticed in metal prices say analysts

Aluminium and copper prices recovered from recent losses as the US dollar weakened against the euro and optimism grew over a Greek debt deal.

However some analysts were cautious over whether gains could be sustained due to plentiful supplies.

Most other base metals also rebounded from a recent downturn that had been partly due to a stronger US dollar, which makes commodities priced in the US currency more expensive to buyers using other currencies.

The euro has gained against the dollar after Greece expressed confidence this week it will soon seal a cash-for-reforms deal.

'We've had a bit of a bounce this morning. One of the reasons is because the dollar has stopped appreciating, in the short term at least,' said Stephen Briggs, metals strategist at BNP Paribas in London.

There was also concern about demand tapering off after the second quarter, when metal consumption is typically strongest.

But a series of infrastructure announcements from Beijing, along with policy stimulus, could yet underpin metals demand into the second half, said Morgan Stanley analyst Joel Crane in Melbourne.

'Given the high level of announcements, should they translate into new starts of infrastructure, that will definitely be a boost for broad metals demand - aluminium in transport, copper in power for urbanisation and rural upgrades.'

Aluminium gained 2.2 per cent to finish at $US1,776 a tonne after hitting the lowest level in more than a year on Wednesday on worries about rising output.