LONDON: Copper prices rose to a seven-month high on Tuesday as speculators bet Chinese demand will rise later in the year, but weak economic data underlined how low consumption remains in the near term.

Prices of the metal used in electrical wiring have surged 11% this month after China’s dismantling of economically damaging COVID-19 controls raised hopes that demand will revive.

But that revival has not yet happened and activity is likely to slacken further as the country heads into the Lunar New Year holidays next week.

Data on Tuesday showed China’s economy grew 3% last year, one of the weakest annual growth figures in nearly half a century.

Chinese copper import premiums are falling and Shanghai exchange inventories are rising. Demand is also weak elsewhere, with a survey showing manufacturing in New York state contracted sharply in January.

But speculators have flooded into the market in anticipation of gains, swelling their net long position in COMEX copper futures to its largest since April. Open interest in industrial metals increased by about $18 billion last week, the biggest weekly rise since Russia invaded Ukraine, JPMorgan analysts said.

Benchmark copper on the London Metal Exchange (LME) was up 1.9% at $9,274.50 a tonne at 1703 GMT having touched$9,308, the highest since June.

LME aluminium was down 0.1% at $2,618.50 a tonne after data showed that China’s annual output last year rose 4.5% to a record high of 40.21 million tonnes.