* China bonded copper stocks rise for 1st time in 9 weeks
* Tin price touches highest since March 13
* Lead hits strongest in seven weeks (Updates prices with lead highest since April 14)
LONDON, June 2 (Reuters) - Copper prices climbed to their highest in 2-1/2 months on Tuesday as more signs emerged that the economy in China, the world’s biggest metals consumer, is extending its recovery from the coronavirus outbreak.
Sales of vehicles, a key demand driver for metals, in China are estimated to have risen 11.7% on the year in May, while the Chinese city of Wuhan found no new cases of COVID-19.
Strong physical demand for copper in China, plus tight scrap supplies, are encouraging bearish speculators to close out positions and supporting its rebound in recent weeks, said analyst Nicholas Snowdon at Deutsche Bank in London.
“You can understand the price path so far, reflecting a forced liquidation of shorts in the market, but I think that’s broadly complete now,” he said.
“The key question for further upside is whether Chinese physical demand can remain as strong going into mid-year as it has been in the past three months. Realistically, there are seasonal headwinds that are likely to moderate the strength of that demand, at least in the near term.”
Three-month copper on the London Metal Exchange (LME) was up 0.8% at $5,525 a tonne by 1420 GMT, the highest since March 13.
Copper, widely used in construction, transport and power sectors, has gained 26% on the LME since hitting a 45-month low of $4,371 on March 19.
The most-traded July copper contract on the Shanghai Futures Exchange (ShFE) hit its highest since March 6 at 44,800 yuan.
* CHINESE STOCKS: Bonded warehouse stocks in China SMM-CUR-BON rose by 2,000 tonnes to 212,000 tonnes last week, according to Shanghai Metals Market, the first rise in nine weeks.
More gains in stocks are expected as copper output resumes in Peru following coronavirus-linked closures, Commerzbank said in a note. “Supply in China is therefore likely to increase in view of the greater availability of concentrate and copper scrap, plus rising imports.”
* PRICES: LME aluminium edged up 0.1% to $1,538 a tonne, zinc climbed 1% to $2,041.50 and lead advanced 1.7% to $1,707.50 after touching a seven-week peak of $1,710.
Nickel gained 1.3% to $12,790 while tin added 1.6% to $15,940, the highest since March 13.
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$1 = 7.1171 yuan Reporting by Eric Onstad; Editing by Louise Heavens and David Evans
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