BEIJING  Copper prices moved higher on Monday, driven by dwindling raw material supply and investors' focus on a potential BHP Group-Anglo American deal that would make the world's largest copper miner.

Three-month copper on the London Metal Exchange advanced 0.5% to US$10,018.50 per metric tonne by 0453 GMT, a two-year high.

The most-traded June copper contract on the Shanghai Futures Exchange was up 0.8% to 81,020 yuan (US$11,184.12) per tonne.

Shortage of copper ore and concentrate, triggered by the closure of the big Cobre Panama mine in December, sent the processing fees for copper to negative for the first time last week.

Spot treatment charges of copper concentrate in China tumbled to -US$2.6 per tonne, the lowest according to Fastmarkets' index tracing data back since 2013.

Meanwhile, BHP Group's bid for Anglo American put supply concerns in focus and intensified fund buying.

The group is considering making an improved offer in the coming weeks, after its US$39 billion initial proposal was rejected.

But even a combined company is not expected to increase overall supply, amid ongoing challenges such as limited discoveries of world-class size, ANZ analysts said.

The Federal Reserve's May 1 policy review is the prime focus for markets this week, with investors already anticipating a delay in its rate cuts after a batch of sticky US inflation and as officials, including chair Jerome Powell, emphasise that even those plans are dependent on data.

LME aluminium was little moved at US$2,570 a tonne, nickel climbed 0.9% to US$19,265, zinc increased 0.9% to US$2,868.50, lead gained 0.5% to US$2,218, tin was 0.2% lower at US$32,350.

SHFE aluminium added 0.7% to 20,640 yuan a tonne, nickel slid 0.3% to 143,030 yuan, zinc climbed 0.6% to 22,940 yuan, lead moved 0.3% up to 17,260 yuan, while tin declined 0.7% to 259,980 yuan.

  - Reuters