"We had another nickel trading range. It looked god-awful, held support down around $1.76 and came rip-roaring back. There was some interest in the December/March spreads at about 6 cents, so you had a bounce off the lows," said one broker.
He added that despite a resolution at Falconbridge Ltd's Kidd Creek facility in northern Ontario, copper showed its resiliency and the trend still looked positive.
Copper for December delivery finished up 0.50 cent at $1.8160 a lb., at the Comex division of the New York Mercantile Exchange, after dealing in wide $1.7830 to $1.8350 cents ranges.
Spot November ended flat at $1.8960 a lb., while the rest of the board closed with gains of 0.25 to 1.05 cents. Comex final copper volume was estimated at 21,000 lots against on Monday's official 17,357 lots.
The Institute for Supply Management index for October was 59.1, above economists' forecasts for a reading of 57.0. "A very solid number, indicating that manufacturing is continuing to expand.
We are seeing the prices paid component getting up there, a fairly strong number which I think will likely heighten the Fed.'s concern on the inflation front.
But all in all, a pretty solid reports on both the production side and on the employment front. Clearly, this sector is holding its ground quite nicely," said Rick Egelton, chief economist at BMO Financial Group in Toronto, Canada.
Traders in London noted the volatility might continue on Wednesday if there are sharp price swings as November traded options expire in London.
They said the strike prices to watch for were $3,800 and $4,200 while the November date was around $4,060. Dealers noted that a move to a supply surplus was expected in copper and that although the surplus may be small, the impact on prices may be large.
"There is some talk that the market has already moved into surplus with stocks building up in China and there are also warnings that the surplus in copper over the next few years may build up significantly.
Certainly the attitude in the market seems to be one of resignation. People accept that copper prices are high and may go even higher, but they believe prices are overstitched basis the fundamentals and would not be surprising to see a significant fall in price."
LME copper warehouse stocks rose 2,450 tonnes to 65,025 tonnes on Tuesday. Comex inventories were unchanged at 3,690 short tons on Monday's daily report.
Meanwhile, the head of the world's largest copper producer, Chile's Codelco, said on Tuesday that he expected the copper market to move into surplus in 2006.
Codelco Chief Executive Juan Velars told Reuters in an interview that the copper surplus would grow to 300,000 tonnes in 2006, while cash copper prices would fall over the next three years to a more sustainable $2,200-2,400 a tonne.
London three-month copper ended the day down $7 at $3,905 a tonne from Monday's close after bouncing between $3,940 and $3,853.