The most-traded copper contract on the Shanghai Futures Exchange rose 0.73 percent to 45,760 yuan ($6,580) a tonne on Tuesday after a strong finish to 2016, as worries of weakening demand receded with expectations that consumption will be strong in the United States and China. ShFE zinc was 0.84 percent higher. ShFE nickel was up 0.29 percent and ShFE lead was 0.83 percent lower.
The rise in copper prices comes despite the latest Chinese forecasts pointing to slower economic and industrial output growth. China's economic growth could slow to 6.5 percent this year from about 6.7 percent in 2016, a government-run think tank said, adding industrial output could grow 5.9 percent this year versus about 6.1 percent in 2016. "Copper is demonstrating strong demand fundamentals going forward, both in the short and longer term," said Jason Chang, chief executive of Australia-based private equity firm EMR Capital.
EMR on Friday bought the Golden Grove copper mine for $210 million, the third such acquisition in a year. But the Chinese New Year holiday in the first quarter of 2017 will mean slowing manufacturing activity, which could cap the metal's upside temporarily, according to traders.
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