Copper rose to its highest peak since mid-May after assurance on economic growth from top metals consumer China and improving fundamentals.

Benchmark copper for three-month delivery on the London Metal Exchange traded at $US7,148.75 a tonne at 2308 AEST from $US7,059 at the close on Tuesday and compared with a session high at $US7,198.

"We are looking quite strong," director of metals research at Societe Generale David Wilson said.

"Everybody is now focusing on Chinese equities. They were down yesterday, which is why we got the sell-off, and now they're back up."

Often seen as an indicator for economic activity, China's benchmark Shanghai Composite Index rose more than two per cent to a two-month closing high.

China's central bank said on Tuesday that Chinese economic growth would slow but there would be no double-dip.

This followed well-received comments last week from Premier Wen Jiabao, who said China would keep working to boost consumption.

Investors had become concerned in recent months over Chinese policies aimed at preventing its economy from overheating, European sovereign debt and a possible double dip downturn.

Data showing new orders for long-lasting US manufactured goods unexpectedly fell for a second straight month in June, posting their largest decline since August, pushed prices briefly lower.
Further upside?

Copper, used in construction and manufacturing, eased more than one per cent after weak US consumer confidence data fuelled concerns over the pace of the global economic recovery.

"Sentiment has turned bullish again this morning following comments from the Peoples Bank of China regarding the nation's economic outlook," analyst at BaseMetals.com James Moore said.

Investors are also awaiting a roster of US macro data, including durable goods numbers and the Beige Book of regional economic conditions.

"Economic data and the results of the Beige Book will continue to lend direction but clearance of the May 10 high at $US7,206 would open the way to challenge the $US7,500 area," Mr Moore added.

Also aiding overall sentiment in recent weeks has been a growing trend of falling LME inventories.

On Wednesday, copper stocks slipped 2,375 tonnes to 411,425 tonnes, having fallen from six and a half year highs at 555,075 tonnes in mid-February.

Aluminium traded at $US2,073.25 versus $US2,056, down from an earlier two month high at $US2,086.

LME stocks for the metal, used in transport and packaging, fell 4,650 tonnes to 4.39 million tonnes.

A large portion of those aluminium stocks are tied up in finance deals.

Many analysts say that the aluminium market is oversupplied, and could put downward pressure prices.

Investors will be keeping close tabs on developments Aluminum Corp of China Ltd (Chalco), after its state-run parent said it would hold a signing ceremony on Thursday likely to be attended by Rio Tinto Ltd executives.

"It won't fundamentally impact the aluminium market -- we still have a problem of oversupply," said SocGen's Wilson. "This I suspect, will be more an alumina deal."

Among other metals, steel making ingredient nickel was at $US20,455 from $US20,550, while battery material lead traded at $US1,995 from $US1,977.

Zinc traded at $US1,946 a tonne from $US1,910 and tin at $US19,325 from $US19,550.

Zinc earlier touched its highest level since May 17 at $US1,967.75.