LONDON: Copper prices rose on Friday after better-than-expected lending data in China, the world's biggest consumer, bolstered the outlook for demand.
Benchmark copper on the London Metal Exchange (LME) was up 1.2 percent at $6,213 a tonne at 1114 GMT.
But after five consecutive weekly gains the metal was set to end the week broadly flat, pressured by weakening global growth, a US-China trade dispute and a strong dollar, which makes metals more expensive for buyers using other currencies.
Data on Friday showed China's banks made the most new loans on record in January after efforts by government to jumpstart investment and prevent a sharp slowdown.
"There's a tentative improvement in expectations around Chinese demand because of this," ICBC Standard analyst Marcus Garvey said.
Given that supply of copper is tight, a pick-up in demand from China should raise prices to around $6,500 if consumption elsewhere does not collapse, he said.
TRADE WAR: Top US and Chinese trade negotiators had "productive meetings", US Treasury Secretary Steven Mnuchin said on Friday.
Several sources told Reuters there was stalemate on key sticking points. White House advisor Larry Kudlow said on Thursday there had been no decision to extend a March 1 US deadline for a deal.
Fears that tariffs would curtail metals demand have pushed prices sharply lower since mid-2018.
INFLATION: China's factory-gate inflation slowed for a seventh straight month in January to its weakest pace since September.
LME STOCKS: On-warrant stocks of copper available to the market in LME-registered warehouses fell to 74,600 tonnes, nearing 13-year lows reached in October.
WARRANTS: Adding to concerns of a supply squeeze, one entity held between 50 and 79 percent of LME copper warrants.
SPREAD: The discount of cash copper to the three-month contract has meanwhile disappeared, suggesting less nearby supply is available.
SHFE STOCKS: Stocks of cooper in Shanghai Futures Exchange warehouses have doubled to more than 200,000 tonnes in the last month, and inventories of aluminium and zinc are also higher.
ICBC Standard's Garvey said this was a normal seasonal inventory build and did not reflect a change in underlying demand.
PRICE OUTLOOK: A dearth of copper mine projects means the market will remain in deficit until 2027, and prices could rise to $10,000 a tonne by 2025, Capital Economics said in a note.
METALS PRICES: LME aluminium was up 1.2 percent at $1,872.50 a tonne, zinc was 2.2 percent higher at $2,647.40, nickel rose 0.2 percent to $12,225, lead gained 2 percent to $2,077.50 and tin was up 0.8 percent at $21,075.
All except tin were on track for weekly declines.
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