Nickel prices rose for the third day in a row on Monday, near a seven-year high because of strong demand for the raw material used to make stainless steel and electric car batteries. Copper prices also posted their biggest rise in more than two months.

Nickel prices rose as much as 2.1 per cent to $19780 a tonne on Monday, close to the high of $20110 reached in February. Falling inventories and the falling dollar also pushed up the price of nickel. The prices of most major metals traded in London rose, while spot gold prices barely changed, and traders are waiting for this week's Fed meeting.

Tom Mulqueen, head of research at Amalgamated Metal Trading, said: "what has really driven the rise in nickel prices over the past few weeks is the strength of the stainless steel market. In the short term, the fundamentals look quite solid, but the macro risks have also been reduced. "

Copper prices rose as much as 3.1% to $9809.50 on Monday, the biggest increase since may 7.

Dutch InternationalYao Wenyu, senior commodities strategist at ING, said lower demand for secondary raw materials from Malaysia had contributed to the rise in copper. Malaysia is a major supplier of scrap copper to China, the largest consumer. At the same time, inventories in the spot market are falling, while the Yangshan copper premium, a key indicator of China's import demand, is rebounding, another sign of a pick-up in demand.

Goldman Sachs, including Nicholas SnowdonAnalysts reiterated that copper prices are targeted at $10500, $11000 and $11500 over the next three months, six months and 12 months, respectively, due to tight supplies in the refining and concentrate markets. They said in a report that their bullish outlook for copper also stems from stricter policies on the use of electric vehicles announced by the European Union.